Flipping a house on your own and doing all your own work may not be feasible based on the extent of the damage to the property and the need to quickly rehabilitate the house to be able to resale it quickly. At this point, you may decide to hire subcontractors to do all the work and you assume the role of general contractor.
As a contractor, your job is to schedule the work to be done and stay on top of the subcontractors to ensure they meet their deadlines and do the job they were hired to do. In order to avoid personal liability while working on your property, you must ensure that the subcontractors you hire have appropriate insurance policies of their own.
Once upon a time, I worked for two of the largest construction companies in the area. One of my responsibilities was to ensure that all paperwork was correctly done and the insurance policies were current with the required amount of coverage set by the general contractor. I found that many well-known companies had altered their insurance certificates to read current dates when in fact, their insurance coverage had lapsed.
Others increased the listed coverage by altering the document. In those days, some fakes were easier to spot than they are today. We have color copiers that make fake money look real and manipulating images with software is not difficult to do. A fake can look just like the real thing in a matter of minutes.
At the time, we requested a one million dollar policy per subcontractor. If someone had been injured at the job site, as happens often in a large construction project, the general contractor would have been liable for all damages and opened himself up for law suits and legal costs.
As a general manager, it is your responsibility to require a copy of their current policies and contact the issuing insurance company to verify the coverage dates and the actual amount the policy covers.
What the subcontractor must provide:
- Liability insurance
- Workman's compensation insurance
- Current contractor's license