5 Mistakes You Should Avoid When Dealing with Independent Contractors

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When you’re hiring a contractor for any home project, you’re basically trusting them with one of your most important assets. Still, so many people rush the process of hiring a contractor and are surprised when things go wrong. Others might end up exposing themselves to legal repercussions or see projects come to a halt because of compliance issues.

This is why it’s important that you know what to look and ask for when picking a contractor, and to avoid some of the common mistakes people commit when hiring one. Here is a rundown of what some of those mistakes are.

Not Following Through with Insurance

One of the first things people have to ask when hiring a contractor is if they are licensed and insured. This will play a crucial role in making sure that you’re compensated in case they can’t complete the project for some reason, cause damage to the property or people on the premises, or if one of their employees ends up injuring themselves. If they don’t have the proper coverage, not only will you have to cover for damage, but their employees could actually sue you for their negligence.

This is why it’s not only important that you ask for proof of insurance, but that you follow through as well. This will allow you to check if their documents are actually valid and what coverage they actually have.

Not Getting Everything in Writing

While it is true that all agreements between you and your contractor are legally binding the moment you strike them, you need to have everything down on paper. Yes, you might be able to argue in a civil suit and win without written documentation, but it will just make everything harder. So, make sure that you have project guidelines, budget, benchmarks and deadlines, and the payment schedule down.

Not Getting the Right or Enough References

When picking a contractor, you want to have a lot of references, and you also want them to be recent. This will ensure that you don’t get the same “reference” they give to everybody. You also want to be able to see some of the projects they worked on in person if possible. When speaking with references, you want to ask questions about the process. You want to ask specific questions about delays if there were any and how easy it was to work with them.

Not Performing a Background Check

Another mistake is not performing a thorough background check on the company and the contractor in question before you work with them. The first thing you should do is check if they’re registered within the BBB. The BBB, which stands for Better Business Bureau, is a customer advocacy group that grades businesses across multiple industries and registers formal complaints against them.

You want to ideally go with a contractor that is registered and has a fairly low number of complaints. This BBB registry will give you some information on how long they’ve been in operation as well, and if they have issues that seem to be recurring with all their projects.

The next thing you want to do is run a background check on the contractor themselves. Doing so is extremely easy nowadays. You can check judgement records in seconds on a site like public records reviews, for instance. Judgement records will allow you to see if they ever had a case against them, whether civil or criminal. They will also allow you to check if they were convicted of fraud, for instance, or any other criminal issues you’d rather not deal with. This is something that can be done fast, and give you a clearer idea of who you’re actually dealing with.

Paying Upfront and In Cash

This is one of the worst, and quite frankly, incomprehensible mistakes people make when they work with contractors. While it’s the norm to pay a certain percentage upfront, there’s absolutely no need for you to pay for the whole project before any work was even done. And, if someone asks you to pay the entire thing upfront, run.

Another mistake people make is making payments in straight cash. The problem with cash is that it’s much more difficult to track. If your contractor constantly insists that you pay them cash, it is a clear red flag. They should be able to accommodate all sorts of payment options, may it be debit or credit card, or check. All of these options are much more advantageous for you as they are much easier to prove.

These are some of the most common and possibly disastrous mistakes anyone can make when hiring independent contractors. Make sure that you only work with reputable contractors with verifiable track records, and keep your ears perked for any potential red flags if you want to avoid pitfalls.

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