[NA] How prevalent is lying about insurance?

[ArrowFlyer86]

TLDR: How common is it for workmen/handymen/etc to claim they have insurance when they don't? How often do you check?

Explanation:
Recently I had a guy come knocking asking if he could take down one of my big oak trees (70+ feet). It's clearly dying and should be felled soon.

He gave me an excellent price and timeline so we signed a contract. Given that it's an enormous tree I wanted to do a little bit of homework just to verify the guy knows what he's doing. I found he's got a properly registered Illinois business in his name, a BBB rating, a website with reviews, and he's got a small fleet of work trucks for the handful of people in his outfit. This put me at ease and I was content that it was a professional op, though I was still concerned that they don't use cranes or bucket trucks to help take down big trees (especially when they're conveniently located next to a driveway/road). They only do it by climbing. I'm no tree expert but that seemed risky.

It is an inherently risky job to be a worker dropping a 70'+ tree weighing thousands of pounds, and the job also has some property risk b/c it could hit cars on a public road, or damage some of my own landscaping/driveway. Thus I wanted to verify his insurance. Each time I pushed to see it he responded with "I've got a lot of experience, it'll be fine, don't worry", then reassured me he would present the right docs on tree takedown day. At the beginning of the month when he was set to chop the tree, he showed up to do the work and failed to present insurance docs. He then was annoyed and flatly stated "I don't have insurance, it's too expensive". Much to his annoyance I sent him and his team home with a cancelled contract; I can't have an uninsured person doing risky work like that.

Since that event I've contacted two other people scheduled to work on my house: a guy who was scheduled to do some repairs on my deck, and a guy who is supposed to install chimney caps. They both have marketing docs and contracts that say "Licensed, Bonded and Fully Insured" (or similar), but when pushed to present docs both of them have flatly admitted they don't have insurance. Only my long-time landscaper was able to demonstrate he has current insurance, which I found a little ironic (most reliable guy ever, and charges nothing).

So far I'm 3 for 4 on finding workmen who aren't insured despite claims they are.
I'm wondering: how often do you check to see if people actually have insurance? Is this a prevalent deceptive practice? Based on my handful of datapoints so far: it is.

 

[hindsight2020]

There should be some liability for misrepresenting insurance status when it comes to contracting for work, in the event of collateral damage to limb or property. A contract made on deceptive grounds should not be the customer's burden.

Good on ya for exercising extra due dilligence though.

 

[FORANE]

If it's beside a power lines I have had success calling the power company and asking them to take it down.

When it's not beside power lines I am fortunate to own my own bucket truck. Even with my own truck it can be risky though.

 

[dans2992]

If you have homeowners’ insurance and maybe an umbrella policy, seems like it would be him exposed and not you…?

 

[Let'sgoflying!]

If you have homeowners’ insurance and maybe an umbrella policy, seems like it would be him exposed and not you…?

I asked mine about having repair people around (before I fixed a roof) and they dropped me, for only asking.
Check your policy wording, some say you can only hire those with a certificate of insurance for worker's comp and other liability.
We cannot get insured repair people in the boonies (it is too expensive) so you either take the chance, or you get that chainsaw out yourself.
Even if you are in the right with general liability if a worker is injured, who wants to fight that in court? You lose even if you win.

 

[Clip4]

I asked mine about having repair people around (before I fixed a roof) and they dropped me, for only asking.
Check your policy wording, some say you can only hire those with a certificate of insurance for worker's comp and other liability.
We cannot get insured repair people in the boonies (it is too expensive) so you either take the chance, or you get that chainsaw out yourself.
Even if you are in the right with general liability if a worker is injured, who wants to fight that in court? You lose even if you win.

Under Texas Section 406 an employee can opt out of workers' compensation coverage. How you would ever know they did would be rather difficult.

 

[Jim K]

My first rule is that if someone knocks on my door asking to do work, I tell them to get lost. Real professionals are too busy working to go around trying to scrounge up jobs. That be a more common thing to do in the 'burbs though I guess.

I seldom hire anything done, but I had two VERY large silver maples taken down last summer. They were overhanging the house and not in great shape. We found a guy by word of mouth. He was cheap, but he was also very busy, so we had to wait several months. We also asked about insurance, and he provided documentation, which we sent to our insurance agent to review. I recall there was something our agent didn't like, but I don't remember exactly what. He had workers comp and liability, but there was something about if one of his guys got hurt on my property and it wasn't job related, I could be sued. I weighed the likelihood of that against the cost of finding another tree cutter, an decided that's what I'm paying my umbrella policy for.

They did a great job and no one got hurt. The did have a bigass bucket truck FWIW. I don't think I would've made the same decision if they were planning to climb it.

 

[Let'sgoflying!]

Under Texas Section 406 an employee can opt out of workers' compensation coverage. How you would ever know they did would be rather difficult.

Under Texas Employee Code of Knowledge section §11.10, only 0.00000000000001% of employees have ever heard of this and even less have done what is necessary to opt out. Thanks for keeping us honest here, lol.

 

[ArrowFlyer86]

If you have homeowners’ insurance and maybe an umbrella policy, seems like it would be him exposed and not you…?

One would certainly think (I mean that's half the reason I have homeowners insurance!), but then again insurance companies are exceptionally cagey at getting out of paying anything they can't legally be sued into paying.

And for the case of taking down a tree, I have two reservations with their approach.
From a human perspective: I don't want this guy getting hoisted up this high in a tree with a rope and a power saw. Cuz if humpty dumpty gets up on a wall, then humpty dumpty has a great fall from 70 feet, wielding a ****ing chainsaw, it's going to be a real problem.
From a financial perspective, I really don't wanna be on the hook for the above in the event that he doesn't have insurance and my insurance finds some way to abdicate responsibility... That would leave me in a bit of a tough spot.

Not really worried about it for low-risk work, but once the job is a certain size and involves potential significant damage to themselves or to me, that's when I'm a little more concerned.

 

[ArrowFlyer86]

If it's beside a power lines I have had success calling the power company and asking them to take it down.

When it's not beside power lines I am fortunate to own my own bucket truck. Even with my own truck it can be risky though.

Gotcha. Unfortunately this one is not beside a power line.
When I had a tree fall from the easement a couple years ago and block the main road into/out of the subdivision, I was able to get the city to come and clean it up right away (on their dime).
Sadly this tree won't qualify for such treatment

 

[ArrowFlyer86]

You either take the chance, or you get that chainsaw out yourself.

Yeah, thankfully there's a bunch of services out here (it's on the border of suburbs/exurbs, but not quite the boonies). I'm sure at least one of them will be properly insured, but their prices and backlog may reflect it.
With a tree this size downing it myself is not a possibility, lest I want to end up as a "Tree Mishaps" thread on the ArboristsOfAmerica board!

 

[Chip Sylverne]

I have a dead pine next to a 10kv service line. Called First Energy, they send out a guy, agreed it was a risk and marked it a danger tree. Then 6 months later a forestry crew comes, whacks down half a live pine that was getting close to the line, looks at the danger tree and tells me they don't remove dead trees anymore. But they will sell me an insurance policy that covers damage to exterior utility components.

It boggles the mind.

 

[DaleB]

There should be some liability for misrepresenting insurance status when it comes to contracting for work, in the event of collateral damage to limb or property. A contract made on deceptive grounds should not be the customer's burden.

Sure, the contractor will be liable. But if liability insurance is too expensive for him to afford, good luck getting compensated for damages to your or your or others' life or property. If he can't pay your neighbor for the damage to their house, or for the carnage caused when he drops a tree trunk on a car full of lawyers, you could end up on the hook for most or all of it.

Good on ya for exercising extra due dilligence though

Indeed.

 

[Clip4]

Under Texas Employee Code of Knowledge section §11.10, only 0.00000000000001% of employees have ever heard of this and even less have done what is necessary to opt out. Thanks for keeping us honest here, lol.

According to a 2014 Texas Tribune investigative report, over 500,000 employees in Texas didn’t have workers comp insurance.

 

[Let'sgoflying!]

According to a 2014 Texas Tribune investigative report, over 500,000 employees in Texas didn’t have workers comp insurance.

That's completely different from an employee opting out, as you said! (below)

The Tribune article is talking about employers that do not provide coverage for employees.

Under Texas Section 406 an employee can opt out of workers' compensation coverage.

 

[35 AoA]

I would opt out of workers comp if I lived in TX too. Because I'd move there again only if I were dead, so it wouldn't be needed.

bdump ching......ill be here all week.....

 

[SCCutler]

It is almost universal that small contractors in the home services market have "licensed, insured and bonded" on their cards.

As if.

In Texas, the only trades that require a license (and for which a license is even available) are electrician, plumber, asbestos abatement, security, fire sprinkler (early morning, I may have missed one).

Try asking one of these guys what "bond" they have - I mean, they simply don't (and I had one sheepishly tell me that his card had that phrase because, quote, "The printer said he had that on all the contractors' cards he prints").

As for "insured," more will have some form of insurance, but often, they will have basic business insurance which includes exclusions of coverage for pretty much all of the perils that business might actually encounter. IE, the have "insurance," just not insurance against any of the bad occurrences you're worried about.

And, if they have insurance and you want that insurance to protect *you*, you must require that they produce a Certificate of Insurance in which you are a Named Additional Insured; do not be fooled by being given a Certificate of Insurance in which you are listed as a "Certificate Holder"; all that essentially means is that you are entitled to rely upon the certificate as being valid, but it conveys no rights to coverage at all.

 

[ArrowFlyer86]

Try asking one of these guys what "bond" they have - I mean, they simply don't (and I had one sheepishly tell me that his card had that phrase because, quote, "The printer said he had that on all the contractors' cards he prints").

This is pretty much what I suspect happens. Some of these work guys see one of the big, name-brand service trucks/biz-cards with that quote on there and then they include it. They know they're not licensed/bonded/insured/etc, but it sounds good and looks professional.
And prior to this big oak tree job, I'd never once considered asking for proof of insurance. I just took it as a given if you say you have it. So if I'm at all representative of the populace, that strategy probably works out for them 99.5% of the time.

I don't mean to be paranoid with all this, but it does have me a little concerned that I potentially have people coming out to do jobs that have a fair chance of injury (themselves or property) if done improperly, and they might just be operating completely uncovered. It's something I'll keep a closer eye on, at least for the bigger jobs.