Licensing

What is a (state-issued) professional license and why is it important?

Professional licensing is a means to regulate activities that are deemed dangerous when performed incorrectly. A state-issued professional license is important because, as a rule, only knowledgeable and practiced professionals are awarded a license. In Florida, licensed construction professionals include general contractors as well as electricians, air conditioning contractors, plumbers, roofers, pool /spa contractors, solar contractors, and others. These licensed professionals have professional license numbers that begin with CAC, CGC, CCC, RP, CFC, etc. For example, CBC058331.

But not every construction trades person requires a Florida state-issued professional license. For example, flooring contractors, cabinet contractors, trim carpenters, painters and others do not currently require a state-issued professional license. Consequently, handymen, people who perform several of these trades, are not regulated by state-issued professional contractor license. However ALL construction tradespeople are limited to types of work they can perform. For example, a licensed roofer cannot build a house (for compensation), and a handyman cannot wire a house (for compensation), etc. In addition, a "registered" professional licensee, in contrast to "certified" licensee, can only practice in the locale that is assigned to their license-not the entire state as is the case with certified licensees.

People often mistake a business license (formally called an "occupational license") with a professional license. The difference between them is this: A business license pertains to a business. A professional license pertains to an individual. Therefore, although a business license may authorize a company to engage in business, it does not authorize an individual to perform a licensed trade.

Local government may have its own licensing requirements especially for trades not regulated by state licensing. For example, Miami-Dade County has over 100 license types including paint, flooring, fence, concrete finishing, door installation, etc.

iCheckContractors reports on Florida State issued Professional Contractor Licenses including any complaints addressed by the Construction Industry Licensing Board.

!A common con is to claim to be "working under another contractor's license." Florida does not allow a licensed construction company to pull a permit for an unlicensed entity that has contracted directly with you. To avoid this pitfall, work with business entities and make sure the (company) name is on the licenses, insurance certificates, contracts, checks, and other important documents.

Also, to ensure that your contractor is authorized to work in your jurisdiction, contact your local building department to verify that the contractor is registered there.

Because licenses can be revoked or cancelled, use iCheckContractors to regularly check the status of your contractors' professional license. A current but "inactive" status requires contractors to reactivate their licenses before performing work for compensation.

Insurance

What is workers' compensation insurance and why is it important?

Workers' compensation insurance is your safety net for costs that may be passed on you by an uninsured contractor who is injured as a result of your project. For example, if a roofer is not covered by workers' compensation insurance and is injured on your jobsite, he may take legal may file a lawsuit as a means to pay for his medical bills, rehabilitation, etc. And even if the lawsuit is unreasonable or unjust, you will pay money to defend yourself. Workers' compensation insurance is generally considered the "exclusive remedy" as it relates to these costs associated with jobsite injury.

What are workers' compensation exemptions?

Even though workers' compensation insurance is required by most states, provisions exist that allow exemption from coverage. These exemptions are generally documented by authorized waivers. Florida allows for workers' compensation exemptions if a contractor meets its strict requirements for exemption.

Although these authorized exemption waivers protect against claims of injury from the exempted individual, problems arise when a contractor, brings a nonexempt (and uninsured) helper to the jobsite. If this helper gets hurt, he may seek compensation from his employer and anyone associated with the job—including the owner! If a person is not covered by workers' compensation insurance or not legally exempt from this coverage, you may be asked to pay for injuries that occur on your jobsite.

How much and what kinds of insurance should a contractor have?

In construction, General Liability and Workers' Compensation insurance are essential. iCheckContractors only provides information about Workers' Compensation insurance. General Liability, Builders' Risk, Commercial auto, and umbrella insurance are other types of insurance that reduce your exposure to risk.

!To ensure you are sufficiently covered, meet with your licensed insurance agent who can assess your exposure to risk and determine whether or not your coverage (and your contractor's coverage) is sufficient. To verify General Liability insurance, ask your contractor to have his or her agent mail the Certificate of Insurance DIRECTLY to you. Policy limits, exclusions, and the benefits of being listed as an "additional insured" should also be discussed with your licensed agent.

Because insurance can be cancelled, use iCheckContractors regularly to the status of your contractors' workers' compensation insurance (and/or exemptions) as reported to the state.

Business Entity

Why is a contractor's company status important?

Unlike in the past, when many construction tradesmen worked for themselves without establishing a company, many now recognize the need to demonstrate a level of professionalism afforded by company ownership- more specifically, ownership of a business entity such as a corporation, LLC, etc. A contractor's company status can help you evaluate his or her professionalism. The longevity of a company may speak to experience as well.

What if the contractor doesn't have a company?

If you pay an individual unlicensed and uninsured contractor (let's call him Jeff Davis) in contrast to a company (Jeff Davis Carpenters, Inc., for example), you may be considered an employer under state and federal law. As an employer, you may be responsible for payroll taxes, unemployment compensation, and workers' compensation. If you fail to meet your obligations and you are caught, you may owe fines in addition to the money owed. Criminal penalties may also be imposed. Although some contractors are sole proprietors using their personal name as their business name, most contractors have formed business entities.

Remember this: Sole proprietors are ineligible for Florida state-issued workers' compensation exemptions.

What else should I know?

The Building Department is the state's first line of defense against unlicensed and non–code compliant construction. Through the permitting and inspection of construction work, the state regulates who does the work, how they do it, and where they do it. You are well served to meet with your building officials.

In addition, successful projects require the participation of knowledgeable owners. Our book and CD can help you work effectively with contractors by providing insider information to help you make informed decisions.

We consult.

If you need specific help with your project, CONTACT US. With over fifteen years of general contracting experience in residential, commercial, and government construction, we provide help you steer clear of problems associated with construction. Whether you are planning a small repair, remodel, or the construction of a new home, the same contracting procedures generally apply.

• Develop a concise and inclusive scope of work that details what, exactly, the contractor will do.
• Research the contractors' qualification including background and experience.
• Guide you with proposal and contract evaluation.
• In addition, we can assist with permit procurement and inspections, and lien releases.