A general contractor hires an unlicensed subcontractor who should have been licensed under TCA 62-6. What is the general contractor's liability?
Correct Answer
D) Liable for subcontractor's work and potential penalties
Under TCA 62-6, general contractors are liable for ensuring subcontractors are properly licensed and may face penalties for hiring unlicensed subs.
Why This Is the Correct Answer
Under TCA 62-6, a general contractor has an affirmative duty to verify that subcontractors hold the required licenses. Hiring an unlicensed subcontractor makes the GC liable for the sub's work quality, defects, and injuries, and also exposes the GC to administrative penalties from the Tennessee Board for Licensing Contractors.
Why the Other Options Are Wrong
Option A: Required to pay licensing fee for subcontractor
The GC is not simply required to pay a licensing fee on behalf of the subcontractor. There is no such 'proxy licensing fee' provision under TCA 62-6; the unlicensed sub must obtain their own license, and the GC faces penalties for using an unlicensed sub.
Option B: No liability if work was completed satisfactorily
Satisfactory completion of work does not shield the GC from liability. Licensing requirements exist regardless of work quality — the violation occurs at the point of hiring the unlicensed sub, not upon defective work.
Option C: Must provide additional insurance coverage
The GC is not merely required to provide additional insurance coverage. While increased insurance exposure may result, the primary legal consequence is direct liability for the sub's work and administrative penalties, not a simple insurance adjustment.
Memory Technique
GC = Guarantor of Compliance. If the GC hired someone without a license, the GC 'guaranteed' that sub's work to the owner and now owns the consequences.
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