Hire Known Contractors: 

Identify a contractor before the disaster that you may be willing to hire.  Don’t wait until after the disaster strike and reach out in desperation to the first one you come in contact with. Find a local Contractor.

Verify Credentials & Work Experience:

Verify that a contractor is licensed to operate in your state before hiring them.  Also check out their past performance.  Ask for references.  Check their website and see if testimonials are posted or past projects that you could contact and verify their work.  Visit the SBZ webpage on checking on businesses.

Multiple Bids:

Get multiple contractors to bid on your project.  That way you will get a competitive price. 

Signed Contract:

Get a final signed contract by the Contractor.  This serves as a legal binding document that you can use in court should you have to pursue legal action against the Contractor for breach of contract.  If there are changes to the work after it started put it in writing and get the Contractor to sign it.  The contract should also stipulate that any changes to the work will be documented.  Get a legal review of the contract before you sign it. Find legal document templates here.

Pay in Phases:

Do no pay up front for work.  If you pay all the money upfront and the Contractor fails to complete the work you will lose all of your money.  You can divide the work into four(4) phases and pay 25 percent as each phase of the work is completed, or pay a portion (1/3) up front and the rest when the work has been completed. 

Do Not Pay In Cash:

Paying with cash leaves no evidence of payment being made.  Hence, an unscrupulous Contractor could take you to small claims court and win.

Don’t Be Rushed:

If Contractors is rushing you to make a decision to hire them walk away.  Don’t be rushed into making such an important decision.  Being rushed could be a sign that the contractor is strap for cash and just want to get their hands on your money quickly.  The Contractor should be willing to work with your timeline.

Don't Let the Contractor Act as Your Agent:

If a Contractor offer to act as your Agent with FEMA or any other organization turn them down.  Agreeing to this could place your smallbiz in jeopardy.  They could end up listing themselves as the beneficiary and redirect any payments coming to you to themselves.

Get Independent Assessment (Scope of Work):

Don’t let the contractor who perform the work do the damage assessment and develop the Scope of Work (SOW).  This is a conflict of interest.  Contractor will no doubt develop a scope of work that benefits them.  Your insurance agency will do their own assessment of the damages.  It’s ok to get an independent assessments by different contractors.

Warranty of Work:

Ask the Contractor if they will warranty their work.  That is, are they willing to come back and fix something at no cost to you if it is determined later that they did not do a good job at fixing it.    Not only should they come back and fix bad work, but they should do so in a timely manner.  The contract should specify how quickly they should respond when called.  Don’t hire Contractors who are not willing to warranty their work.

Verify Bonded or Insured:

The Contractor should be Bonded or Insured in order to guarantee that they can accomplish the work or be able to refund you if they cannot.  Ask the Contractor if they are bonded or insured.  Ask for proof.  Learn more about Bond or Insurance.

Verify Work In Progress:

Verify the work as it progresses.  You can designate yourself as the Project Manager or assign someone in your organization to be the Project Manager.  Check the work as it progresses in order to identify and resolve issues as they arrive.  Ensure that the right materials are being used and that the work is progressing on schedule.  Don’t wait until the project is completed.  Waiting will make it costlier in terms of time and funding to get problems fixed.  The Contractor may not be so cooperative once the job is done and they are paid.

Avoid Contractor Financing:

Avoid Contractors who offer to finance the project.  Financing will come at a high cost.

Obtain Building Permits:

A permit may be required from the City depending on the type of work that has be done.  Get the permit yourself and don’t rely on the Contractor for it.  The Contractor will charge you for the service and in some cases they will do the work without the permit then you get fined by the city later when they find out.