Do I have to pay for a contractor’s insurance?

UPDATED: Oct 1, 2022

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Do I have to pay for a contractor’s insurance?

I hired a contractor and paid him $6000 in April, 2018. He never started the job. I asked for a refund. He refunded $4500 and stated I had to pay for the additional insurance that he had to purchase in order to do work in this building. Is this legal?

Asked on August 7, 2018 under Business Law, New Jersey


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

No, it is NOT legal if you did not specifically agree to it in advance--while a customer can pay for a contractor's insurance, that must be part of the agreement or contract between them. Furthermore, even if it had been part of the contract, if he violated the contract by not doing the work--as is what happened here--you would still be entitled to all your money back: he cannot fail to do the job but keep part of your money. If he will not return the $1,500, you could sue him (such as in small claims court, as your own attorney or "pro se") for it.

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