Tips for hiring contractors

Tuesday, March 19, 2019by  PEMCO Insurance

​Your home is so much more than four walls – it's the stage on which you live your life.

When you're ready to remodel or repair yours, make sure the person you choose for the job truly can deliver the results you want. Here's what you'll want to know to get started:

Bonding and liability insurance

In Washington and Oregon, contractors must register with the state and maintain a bond and insurance. Although it's illegal to work without those requirements, some marginal operators skip them and bid projects at cut-rate prices. (Check out these tips to spot a contractor scam.) If you hire an unlicensed, uninsured worker, you assume the risks of a sub-par job. You're also more likely to be on the hook for liability if a worker damages a neighbor's property (for example, felling a tree in the wrong direction).

In Washington general contractors must maintain a bond of at least $12,000 to pay for repairs if your project is done poorly or if they don't complete it. In Oregon, it's $20,000. Specialty contractors like painters and electricians may have lower bonds.

They also need at least $250,000 in combined property damage and liability insurance in Washington and up to $500,000 in Oregon, with some specialties requiring less. That protects you if, for example, an errant nail punctures a pipe and floods your house.

Workers Compensation coverage

If contractors have employees, they must maintain Worker's Compensation insurance to cover injuries if they get hurt on the job.

That's important because anyone injured on your property, including paid contractors, can sue you for damages. Your PEMCO homeowners policy provides liability coverage (up to the limits you selected) and legal-defense costs. But unfortunately, it can't eliminate the worry, inconvenience and sleepless nights that accompany a lawsuit.

Finding the right contractor

Washington and Oregon have many skilled, ethical contractors. Here are three quick tips to help you find them:

  1. Ask friends for referrals, check consumer websites or contact your county's Master Builders Association.
  2. Make sure the contractor is registered, bonded and insured. In Washington, contact the Department of Labor and Industries at 1-800-647-0982 or visit In Oregon, contact the Construction Contractors Board at (503) 378-4621 or visit
  3. Get written bids and check references, including suppliers, who can tell you if the contractor has a responsible payment record.

Once work begins

Be sure all permits are completed before the work begins. Use caution with down payments or paying for work not yet completed. When advancing money for materials, make checks payable to both the contractor and the supply house. If there are changes to the work, have the contractor put it in writing, including scope and costs.

During the work, check to make sure required inspections are completed.

You're not in this alone 

If your project is part of an insurance claim, know that PEMCO's in your corner! If you have questions or concerns, talk to your PEMCO adjuster or call 1-800-GO-PEMCO.

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