Hiring Your friends, family and day laborers

[Account Closed]

Hello everyone, I have a question that pertains to getting the right insurance. I'm sure many investors who first started out had hire their friends, family and day laborer from craigslist or home depot because its cheaper than a contractor and in the beginning there's not enough funds so things need to be stretch out.

I have done my research and shopping for general liability insurance seems like shopping for a car, there's so many of them with different terms. Your friends, family and day laborers are consider independent contractors and not employees so technically you sub the job to then but then that means they are require to get insurance themselves but that doesnt make sense if a friend is only hire for one day to paint 3 rooms.

Whats the right insurance that would cover for any lawsuits and injuries in case a friend, family member or day laborer are hire for a job and something happens? 

I'm located in the New York New Jersey area, I don't know if this insurance is different in every state or its universal.

[Frank Chin]

If you do rentals. make sure you buy insurance that covers rentals. But for hiring people to do work on your rentals, I gone through this already, make sure they're licensed and insured. On this you got to be careful, and ask them to furnish you with a certificate of insurance. I once had a home repair company come for an estimate, was ready to give him the job, says on the truck licensed and insured, and he tells me business is slow, his insurance was cancelled for non-payment. Since it was a significant job, his price was good, I only agreed to give him the work if he paid up on his insurance, show me proof of payment, and put me down as an additional insured. This would guaranty if he then cancelled his insurance, I'll be notified. I learned this little trick when a tenant got renters insurance, sent me a certificate of insurance, then was canceled for non payment. His apartment was flooded during a heavy rainstorm and he wanted to file a claim against my insurance. So I said, "file against your insurance first". He then admitted he canceled it, at which point I threatened to evict him, for violating the lease.

I once set up a management company for my rentals, and checked into getting my own workman's comp. For this, I have to maintain a workman's comp policy of at least $25,000, maintain payroll records, and subject to inspection by the state. After they told me the requirements, figured it's simpler to hire companies that's licensed and insured.