Am I in the wrong for holding payment on a job because a contractor refuses to provide a copy of his insurance?

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Am I in the wrong for holding payment on a job because a contractor refuses to provide a copy of his insurance?

I hired a sub-contractor to perform roofing work for a client of mine through my company, under the impression he was licensed and insured. I told him I was paid by invoice and that it was a 30 day process but I would try to pay him some before if I could. I did pay $300 of the $1090 before the 30 days. I now have the rest of the payment in a check waiting to give him and asked that he provide me with a copy of his insurance for my records because it is a requirement by my client that anyone who performs work to be insured. He isn’t willing to give it. Can I withhold money until he does?

Asked on September 15, 2011 under Business Law, Louisiana

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

I would be concerned if the person who did the roofing work refuses to provide you with the requested insurance policy. If you have concerns that the roofer is not a licensed roofer, you might look him or her up online with your state's contractor's licensing board.

In California, if a person who is not a licensed contractor performs work requiring a contractor's license, the unlicensed worker cannot bring a lawsuit for money owed. This may be the case in your state. If so, you are entirely justified in holding back the money based upon documentation being provided to you as stated in your question.

If you have a written sub-contract for the work of the subcontractor, I would carefully read it to see what duties are required by him or her about providing you insurance information. From what you have written, it seems you are justified in holding back the money.


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