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Making the Safe Choice When Working with Outside Contractors
By: Eric Spacek, JD, ARM

When there is a construction project at your facility, having it completed correctly and on time typically become your main goals. To achieve this, it’s important you hire the right contractor for your job. This is not always as easy as it may first appear, especially for churches, which often have a ready volunteer base to choose from. While hiring a church volunteer may seem like a smart way to keep the church budget in check, one bad accident or improperly implemented project could cause devastating damages to your organization, both emotionally and financially.  Enlisting a licensed professional may cost more, but doing so can help lower your risk of a liability claim.

For high-risk projects, such as roof work, HVAC or electrical work, or major construction projects, an outside contractor is recommended. When hiring a contractor, look for someone who has adequate insurance, is trained and properly licensed, and has good references. To help make the best decision possible, consider following these steps.

Multiple Bids – Obtain several bids before selecting a contractor to ensure you receive the highest quality of work while still paying a reasonable price. Remember, a low bid can be an indicator of subpar work being done or inferior materials being used. Regardless of your budget, the lowest bid may not be the best choice.

References – No matter the price, don’t make a final agreement until you have checked their references. As with anything, research is key to making sure the contractor is suitable for your project. Ask questions such as: Was the project finished on time and within the budget? Did you have any issues when working with this contractor? Were you pleased with the final result? You may want to consider checking is the Better Business Bureau to see if any complaints have been logged. You also can check online court and government records to learn about their history and verify they have the proper licenses for the work being completed.

Put It in Writing – Make sure you have a written contract that lays out the terms of your agreement, including scope of the work, price, payment terms and anticipated timeline, including start and completion dates. In addition, make sure the contract includes a hold harmless agreement and an insurance clause requiring the contractor to be fully insured and naming your church as an additional insured. They should have the following coverages:

• General Liability
• Property Damage
• Workers’ Compensation
• Excess or umbrella liability
• Insurance limits equal to or greater than the church’s

Make sure that the contractor provides you with proof that they have named your church as an additional insured on their insurance policy. While a certificate of insurance provides some evidence of insurance coverage, the best proof is an “additional insured endorsement” to their insurance policy, which shows that your church has been named as an additional insured.

Do not enter into a contract agreement with anyone who is not willing to back up their work.

Follow Consistent Procedures
While following these steps may seem like a lengthy process to go through, especially when the project is small, it’s important to spend the time and follow these precautionary measures before hiring a contractor for any job. At a minimum, contractors are highly recommended in the following situations:

• When the 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 the church premises, such as regular cleaning and lawn service

Making the Right Choices
Starting a new project on your facility is a big enough task to manage without the stress of a faulty contractor. Finding the right one can ease your mind and give you one less thing to worry about throughout the construction process. Protect your ministry and congregation by taking these important measures before hiring a contractor.

As Senior Risk Management and Loss Control Manager at GuideOne Insurance, Eric Spacek is responsible for the research, development, recommendation and implementation of GuideOne’s strategic risk management programs.

Before joining GuideOne, Spacek served as Minister of Operations for a large Methodist church in Raleigh, N.C., where he was responsible for church finances, facilities, human resources and a wide variety of risk management programs. Previously, Spacek was a liability litigation trial attorney in Washington, D.C.

Contact Spacek by calling 1-877-448-4331, ext. 5118, or email him at espacek@guideone.com.  More information is available at www.guideone.com.

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