Uninsured Handyman?

[Julie O.]

Fellow landlords, I'm wondering if you all worry about hiring "handyman" type help around your properties?  Do you worry about hiring someone that doesn't carry liability insurance?  In addition to the 4 rental properties that I own, I've somehow ended up managing 6 more homes for other investors.  In the past, my licensed and insured GC has helped out with small jobs for me, but our market here in the Denver area has gotten so busy that he just doesn't have the time for this any more.  I'm considering paying the $800 per year premium for my new handyman, I'd welcome thoughts about this.  Handyman charges $12/hour, my GC is $75.  Do you all think it's worth it?  Do you hire uninsured help to work on your properties and just rely on your own homeowner's policy for coverage?

[Chanté Owens]

I can say this, having worked doing insurance claims for many years; you can have people sign all the waivers you like, and it MAY help you for the final outcome, but it does NOT stop them from filing a lawsuit against you, and you DO need to answer that lawsuit and handle it; therefore, the price you pay for attorney's fees, etc, can far exceed you having made sure your handy person has insurance.

It all sounds good to have this person who you pay $10, $12, $15 an hour and you're saving money, and yes, nothing may NEVER happen...until it does. Regardless, you are going to pay some money if a claim/lawsuit is filed, and I can almost guarantee you that the cost of defense can cover you paying insurance for a handyman for a long, long, time. Just my .02. 

Additionally, with my clients who hire subs. I always recommend to them (whether they listen to me or not is a different story) that if a project goes longer than expected, that they have their subs resubmit proof of insurance. I know (gasp) it's hard to imagine, but sometimes people in general (not just subs) will get insurance in place to get a job, and then cancel the policy the next month. They've been able to provide proof of insurance for the job, but then don't pay for any additional insurance. Many contractors have caught subs doing this...and without going into a long and detailed explanation about this, the short story is  - it's a bad, bad situation should there ever be a lawsuit. It's hard enough when everyone has the insurance that they are supposed too, because insurance companies will fight amongst one another so they don't have to pay; so imagine what happens when YOU are the only one who has insurance or worse - you don't.