By Eric Spacek
When doing a project on your church property, hiring the right contractor is an important step to getting the job done well. Choosing a church volunteer to do the work may seem like the fiscally responsible thing to do, but one bad slip or poorly performed job could mean a major heartache for your church.
Hiring a trained professional may cost more upfront, but it will definitely provide you peace of mind and help ensure your job is finished correctly. The key with an outside contractor is finding one that is trained, licensed and has good references.
Projects that may require an outside contractor include higher-risk activities such as roof work, tree trimming, HVAC or electrical work, and major projects such as construction, renovation or demolition projects. It is important these workers are adequately insured while they are performing work on your property. Not only are they bringing along their tools, but they also bring with them the risk of liability for property damage or personal injury.
For example, a 29-year-old employee of a contractor fell from scaffolding during renovation work at a church, sustaining multiple broken bones, leaving him permanently unable to return to his work. The contract for the work failed to adequately protect the church and, as a result, the church was liable for the worker’s injuries. The total cost was more than $650,000. In another example, a new church under construction was destroyed when an uninsured roofing contractor accidentally set the roof on fire. Damages in that case exceeded $1 million.
To help protect your church from having a similar situation, consider taking the following precautions.
Obtain multiple bids. To ensure you are receiving the best price and highest quality of work, obtain several bids before selecting a contractor. Keep in mind that the lowest bid is not always the best bid, as it can indicate a lower quality of materials being used or less extensive work being performed. Also, don’t skip this step just because the proposed contractor is a congregation member.
Check references. It is important to research your short list of contractors to find out which is the best fit for your project. Talk to other places where the contractor has performed work and ask questions like: Did they finish the project on time? On budget? Were there any issues? Were you pleased with the final result?
It is especially important to determine if they have performed similar work before, and to check with the Better Business Bureau (BBB) to see if they have any registered complaints. Check online court and government records to learn what you can about the contractor’s history and to verify they are properly licensed.
Have a written contract. Set out the scope of the work, price for the job, payment terms, anticipated start and completion dates, and other terms in your contract. Other items to consider include payment obligations, fees, warranty information and dispute resolution. To fully protect your church, ensure the contract includes a hold harmless clause and an insurance clause requiring that they be fully insured. Don’t enter into a contract agreement with someone who is not willing to back up their work financially.
Make Sure they’re insured. Don’t put your church’s claims history – and potentially premiums – on the line when hiring a contract worker. Instead, the contractor’s insurance should be at risk if an incident were to occur.
They should have the following coverages:
- General liability
- Property damage
- Workers’ compensation
- Excess or umbrella liability
- Insurance limits equal to or greater than what the church has.
In addition, it’s a good idea to require them to add the church as an additional insured on their insurance policy. If the contractor is not insured, you may want to reconsider hiring them to do any work on your property.
Necessary protection. Performing these steps can seem a bit overwhelming when trying to hire an outside worker, especially if the job appears to be small. This leads to wondering if following these procedures is always necessary. Ideally, these precautions would always be taken before anyone was hired, but at a minimum, they are vital in the following situations:
- When work is significant, such as new construction, renovation or demolition;
- Where work is high-risk, such as involving roofs, electrical systems, trees, scaffolds or ladders;
- Where work is regularly undertaken on church premises, such as regular cleaning and lawn service.
Taking extra precautions to ensure your facility is properly protected is another way to practice good stewardship over the people, property and financials entrusted to your care.
Eric Spacek is senior risk manager at GuideOne Insurance, West Des Moines, IA. [www.GuideOne.com]