Use of unvetted contractors brings unwelcome risks

July 13, 2023

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In tough economic times and a tight labour market, the opportunity to use unvetted contractors to undertake repairs can be enticing. However, homeowners, business owners, property managers and insurers must keep in mind that using lower-priced, unvetted labor can have dangerous consequences in the long run. This blog will explore some of the risks and human factors involved in using unvetted contractors for repair work.

Safety and security: who we allow into a property

People must be able to trust the workers who come into their homes and offices. Tradespeople undergo security background checks as part of the process of joining a vetted repair network to verify they have no criminal records. It is ill-advised to invite contractors into your business or living space if you cannot have confidence in their background.

Further, vetted contractors must be well-versed in the safety protocols required by the relevant network — such as the HSE in the UK and OSHA in the U.S. — and committed to full compliance. Abiding by these requirements helps to prevent contractor injury and reduce liability for all stakeholders. Non-vetted contractors may have less rigorous safety standards, putting workers and others at the repair site in harm’s way. Policyholders deserve to have peace of mind that repair work on their homes and offices will be of high quality and not result in any future safety issues.

Another critical area of compliance is data security. The European Union’s general data protection regulation (GDPR) is the among the strongest privacy and security laws in the world, and other regions are strengthening their data protection regulations in the face of increased cyber threats. The data associated with repair jobs must be stored and used appropriately to ensure regulatory compliance and protect the privacy of the people and businesses served. Home and business owners can rest assured that contractors by managed repair networks have the proper controls in place to safely handle their personal information.

Financial and ethical concerns

Outside of policy excess, policyholders do not in general directly pay for repairs covered by insurance; nonetheless, there are financial and ethical issues they and their carriers need to consider when it comes to selecting trustworthy contractors. Before undertaking a repair project with a contractor, it’s important to be sure the business is viable and financially sound — especially during stormy economic times, when contractors are under added pressure. We’ve all heard horrendous stories of people left in the lurch by contractors who went under and abandoned jobs midstream. Using vetted contractors can help to prevent such nightmares from becoming your reality. (If a contractor in a vetted network was to fail, repairs would be completed by another network contractor.)

It’s preferred to enlist contractors with solid financial practices and who make proper use of the resources entrusted to them. Vetted contractors are audited regularly to ensure their accounting records and tax payments are above board. This process also verifies they provide fair wages and proper working conditions, utilise legal and appropriately trained labor, and avoid all types of modern slavery.

Providing true value

Price is, of course, an important factor in selecting a contractor partner for a repair job, but it is not the only factor worth considering. In this period of inflation with rising labor and materials costs, a repair estimate that’s significantly below the current market rate is probably too good to be true.

Insurers and property owners must use further discretion to identify partners that align with their values, can be trusted, and will complete quality work. Turning to vetted contractors offers the highest likelihood of the job getting done right, safely and for a fair price.

In my next blog, I will explore some of the materials-related risks involved when using unvetted contractors.

Learn more — read about Sedgwick’s commercial repair solutions (which use only licensed and vetted contractors) for the UK and U.S. markets