Independent Contractor Accident

[1a2b3c]

I know someone working as an Independent Contractor that was injured on the job 17 months ago. He fell from a ladder and compressed 2 vertabraes in his back. He had no insurance whatsoever, and has only received minimal medical attention due to that fact. My question is: The financial institution contract stated that Prior to, or at the time of the inital advance of the proceeds of the loan to the borrower, Lender shall be in receipt of the following: Insurance policies for (1) public liabilty insurance and Worker's Compensation insurance
for Owner and Contractor; (2)hazard insurance (builders risk) providing all risk coverage on the residence........

The only insurance they requested was builders risk purchased by the contractor.
Can the financial institute be held liable for issuing the loan without Worker's Comp?

Also could the Homeowmers insurance be liable? Texas is my state.



[This message has been edited by 1a2b3c (edited July 01, 2000).]

 

[HomeGuru]

<BLOCKQUOTE><font size="1" face="Arial, Helvetica, Verdana">quote:</font><HR>Originally posted by 1a2b3c:
I know someone working as an Independent Contractor that was injured on the job 17 months ago. He fell from a ladder and compressed 2 vertabraes in his back. He had no insurance whatsoever, and has only received minimal medical attention due to that fact. My question is: The financial institution contract stated that Prior to, or at the time of the inital advance of the proceeds of the loan to the borrower, Lender shall be in receipt of the following: Insurance policies for (1) public liabilty insurance and Worker's Compensation insurance
for Owner and Contractor; (2)hazard insurance (builders risk) providing all risk coverage on the residence........

The only insurance they requested was builders risk purchased by the contractor.
Can the financial institute be held liable for issuing the loan without Worker's Comp?

Also could the Homeowmers insurance be liable? Texas is my state.

[This message has been edited by 1a2b3c (edited July 01, 2000).]<HR></BLOCKQUOTE>

The construction loan lender would not be liable because the homeowners insurance would be involved. The normal procedure is prior to a loan closing, the homeowner must forward a certificate of insurance naming the lender as additional insured. The lender in most cases will not close and fund the loan without this insurance.

Remember that the lenders job is to provide funds and not to act as the owner of the property, although they have a secured interest in the property through the mortgage. If they made a mistake and did not follow up with confirming that both types of insurance policies were in place, it may be their fault but the liability remains with the homeowner. Even if this insurance was not required or enforced by the lender, the homeowner should have paid for coverage anyway.

It appears that the contractor was not licensed. If a contractors license was needed for the work being completed, the homeowner is a fault for not hiring a licensed contractor who would have had the proper insurance.