Should/Do Property Managers only use Contractors with Insurance?

[Stephen Kunen]

I'm curious to know what the standard in the industry is with respect to the types of contractors property managers should be using for single family homes when they need repairs.  Is it common to require the contractors to either be covered by their own insurance for their errors or injuries on an owners property, or to have the property managers covered under their own insurance for the property managers injury on the owned property? If something goes wrong when the contractor who is not insured is injured on the property,and ordered to the property at the direction of the property manager, isn't the owner liable?

It seems the cost of repairs would go up to ensure that everyone who steps on the property is insured. Where does the balance come into play in reality? For example, is it more important to have the property manager get someone onto the property quickly to correct any emergencies that arise to prevent any damage to tenants or property?

Maybe only at a certain threshold, like apartment buildings of a certain size, does it make sense to be firm on this requirement of "all who step foot on the property must have commercial insurance/ workers comp, etc." 

Thanks

[Blair Poelman]

This really depends on the property, and the property manager.  I know plenty of slumlords that use street laborers (guys they pick up at the home depot parking lot).  They're not trained, let alone insured.  Talented and hard-working - often times yes.  If you're doing the work on your own property and you are the one hiring these guys, then that's your biz and you do whatever you want.  It's your property and you should have insurance.

When you hire a professional property manager the standards of service change ( or rather, they should change).  You hire a pro to get a pro-level job.  They in turn should be hiring pro's that at a minimum have gone through licensing.  The insurance thing can fall upon the property owner, and this should be addressed in the management agreement.

Also, keep in mind that "licensed" doesn't equal honest or competent, and unlicensed doesn't mean incapable.

When it comes to large properties such as apartments 5 units & bigger or larger homes, I'm always using licensed, insured, bonded guys.  Too much liability on something with that big of a footprint.  Also the type of work - if you're dealing health dept. violations and having to handle mold or lead, for the sake of your tenants or buyers, you really should use a professional and do the job right - otherwise you're the one left holding the bag when a kid tests for elevated lead.

I've used both licensed and unlicensed and I've had both good and bad experiences with each.