Hiring an unlicensed electrical contractor can be tempting, especially if you’re on a tight budget. However, the risks of doing so usually outweigh the marginal benefits. You put yourself at serious risk for injury, catastrophic property damages, and even death in some cases.
Hiring an unlicensed contractor does not guarantee sufficient knowledge and proper training to carry out the job safely. Unfortunately, since electrical wiring is not seen or smelled regularly, many fail to realize its dangers. In reality, the work of unlicensed contractors usually results in electrical hazards hidden beneath the walls leading to electrocution and fires. NFPA reports that the second leading cause of household fires in the US from 2012 to 2016 are electrical failures or malfunctions.
Besides safety risks, hiring an unlicensed contractor may void your insurance policy. Insurance does not cover fire-related damages if an unlicensed contractor performed the initial work. Inspectors would more likely rule negligence as the cause of the fire. Moreover, you will also be held responsible if an unlicensed electrician suffers an injury while on the job.
Lastly, keep in mind that hiring an unlicensed contractor is illegal. Sadly, many building owners still fall prey, especially when these unlicensed electrical contractors perform scams where they show a business occupational license number. They make you believe that they are allowed to provide electrical contracting services, when in fact, this business permit is not tantamount to a regulatory license to provide such services. You are at risk of violating laws and compromising the integrity of your project. In the end, you might end up spending more money than you hoped.
Given that many people still fall for these scams, it is essential to determine if your electrical contractor is licensed and insured. This article will discuss how you can choose and verify the right electrical contractor to avoid becoming a victim. We will also look at the differences among licensed, registered, and certified electrical contractors, so let us start!
What is a licensed and insured contractor?
Each state in the US has its own licensing requirements for electricians and electrical contractors alike. Generally, a contractor’s license is needed to hire licensed professionals, bid on projects, and apply for every project’s necessary permits.
The state of Minnesota requires that any person or entity be licensed before they can offer electric work services such as repairing, altering, maintaining, installing, and wiring any devices, equipment, or appliances. In its simplest form, a licensed electrical contractor is anyone who has proven his or her abilities, passed a rigid examination, and continuously taken education and training.
So what does a company need when getting a license? Before applying for a new license in Minnesota, a contractor shall have a business structure and a registered business entity. The requirements are as follows:
- License fee;
- Assumed name verification;
- License application form (accomplished);
- Disclosure of business owners, partners, officers, and members form (accomplished);
- Bond (for new contractors, changed bonding companies, and changed business structures only)
- Certificate of responsible licensed individual or Master Electrician
- Certificate of liability insurance
- Certification of Compliance with Minnesota Workers’ Compensation Law
If a contractor has multiple projects in different states, it usually needs to obtain a contractor’s license in each of those states. Apart from that issued by the state, there are also counties and cities requiring and issuing another contractor’s license.
Typically, contractor’s licenses are valid for a year, so they need to be renewed annually.
Moreover, a contractor shall obtain a surety bond of $25,000. The applicant shall sign the original document with a power of attorney attached.
Lastly, electrical contractors in Minnesota also need to file an examination application and pass the said examination.
Keep in mind that there are different types of contractors. An electrical contractor is required to have an electrical contractor’s license to carry out its function. However, general contractors and construction firms that partner with licensed electrical contractors to perform electrical work do not need to have an electrical contractor’s license.
A contractor cannot obtain its license without a licensed professional onboard its team. So now, let us discuss the requirements that electricians shall meet to get their licenses.
Note that there are various license types for electricians. To obtain each license, an electrician shall meet the minimum requirements, especially in terms of experience. Below are the different license types and minimum experience required:
- Class A Master Electrician (60 months)
- Class A Journeyworker Electrician (48months)
- Maintenance Electrician (48 months)
- Lineman ( 48 months)
- Class A Installer (12 months)
- Class B Installer (12 months)
- Power Limited Technician (36 months)
Under each license type, there are necessary skills in which an applicant must be well-versed. There is a certain maximum credit allowance for each skill to ensure that licensed electricians are well-rounded and knowledgeable in different applications. Aside from meeting the minimum experience requirements, an applicant shall pass the examination to obtain the license.
Responsibilities of an Electrical Contractor
So what exactly does an electrical contractor do? Generally, it is responsible for all the electrical work in a construction project. This work involves the installation, altering, repairing, planning, and installing electrical apparatus, wiring, and equipment for various systems in a structure.
Other specific responsibilities include the following:
- Ensure that all its electricians are actively licensed or registered.
- Ensure that unlicensed workers are always supervised by licensed electricians when performing electrical work.
- Keep records of the work experience of all unlicensed workers performing electrical work and provide such records upon request.
- Inform the Department of Labor and Industry (DLI) of the loss of the electrician-in-charge within 15 days.
- Obtain all the necessary electrical work permits before the commencement of any electrical work.
- Conduct necessary inspections.
- Ensure that its license number appears on all company vehicles at all times.
- Ensure timely responses to requests for information from the DLI and other authorized inspectors.
- Renew license in a timely fashion.
Licensed Contractor vs. Registered vs. Certified
Often, we hear about a contractor being “licensed” or “registered” or “certified,” but what exactly do these terms mean? Are there differences, or do they all mean the same? Let us discuss in-depth below:
When we say that an electrical contractor is licensed or certified, it means that the company has met all the requirements to obtain a state-wide license. With this license, it can carry out its services throughout the state.
When we say that an electrical contractor is registered, it implies that the company is registered to provide its services in the county or municipality where it is registered. A registered electrical contractor has a certificate of competency granted by the Electrical Contractors’ Licensing Board. It can only provide its services in the counties and municipalities where it has a registration
How to Avoid Falling Victim to an Unlicensed Contractor
Here are some of the most important things you need to do to avoid falling prey to the scams of unlicensed contractors:
Check the website.
The fastest way to learn more about an electrical contractor is through the internet. It is the best place to start, as it allows you to check their certifications, services, and other credentials. A good website also shows a contractor’s past projects. If it has a rich portfolio, be it of big or small projects, you can be confident that it provides quality services that many people trust.
Verify license and insurance.
Licenses and insurance policies are in place for several reasons. Firstly, they ensure the safety of all electrical work carried. Secondly, they guarantee that all electricians have the relevant experience needed to perform such work. More importantly, they protect your interests as a customer. Particularly, the bond assures you that you will be compensated for damages if an electrical contractor leaves the project unfinished. Meanwhile, the insurance guarantees that you are covered even if incidents or accidents happen while the project is ongoing.
Positive feedback and word of mouth are not enough proof that an electrical contractor is licensed and insured. You need to dig deeper and look at the credentials yourself. The foolproof way to verify a contractor’s license and insurance is to ask for the evidence. If it hesitates, you already have reasons to doubt that it is licensed and insured. However, you can still check with a local licensing board to find out more about the company.
Ask about the training of electricians.
A legit electrical contractor cares about the growth of its employees because it means good for business. It invests in its human resources to make sure that it maintains its reputation. It is a very technical job that requires years of experience, so regular training and capacity-building activities are necessary. Do not hesitate to ask the electricians directly about the training they get from the company. If the contractor provides none, you might want to reconsider hiring the said contractor.