Your children want to have an acrobatic troupe entertain at their next birthday party in your home.  You talk with the owner when they arrive to set up:

You: Hi, I’m [state your name].

Owner: Hi, I’m the Amazing Zorgon.  Call me AZ.  Your home is beautiful – quite valuable, I suppose…

You: Thank you, I think.  AZ,  I have a few questions.  This is safe, isn’t it?

AZ: Not to worry!  Traveling unlicensed circuses aren’t even among the top 2 most dangerous businesses in America.  [Turns his head to shout at his crew.] TIMMY!  HOW’S YOUR BACK TODAY?

You: Of course you’re insured, right?

AZ: Not necessary: anything happens, we figure someone with a house this nice can pay the doctors and the lawyers and have something left over, no problem [laughs heartily, wipes a tear from his eye].  Hey, while you’re here, where should we put the Amazing Projectile Wheel?  You really gotta see that thing when it starts moving… of course it shouldn’t be near anything valuable….

Of course you’d send Zorgon and his troupe away.

Surprisingly often, otherwise successful and prudent people let unlicensed and uninsured contractors and their workers into their homes all the time, to climb ladders with circular saws, fire nail guns, and generally show off their physical prowess.  Fortunately, most of the time nothing bad happens.

But construction is a risky industry, and even on well-managed job sites, accidents happen.   Because of that, licensed contractors in California must carry workers compensation insurance, if they have employees.  Workers comp insures workers in case of injury and it provides employers and homeowners some protection against employees filing lawsuits in case of injury.  That insurance is one reason that licensed contractors cost more.  In my construction business in the San Francisco Bay area, I pay between 15 cents and 35 cents in workers comp insurance premiums, per dollar in wages paid to my employees.

So the next time you’re considering hiring ‘that guy with the truck’ to remodel your master bathroom, take a close look at your property and financial statements and think about what happens if something goes wrong.  Who’s most likely to pay in the end: the Amazing Zorgon, or you?