Is Contractor Directory Service BuildZoom Exposing Itself To Significant Risk?

When BuildZoom launched in March of this year, it served as a listing service for contrators. The intent was to leverage publicly available data from various state contractor licensing boards to connect homeowners with potential remodeling contractors.

The site allows contractors to “claim their profile” and offers paid services for vendors, similar to Yelp. Backed by famous Silicon Valley startup incubator, Y-Combinator, BuildZoom just received another $1.4M of funding and announced plans for the future. According to TechCrunch, the company wants to become more than just a listing service – it wants to get in the middle of transactions:

“Right now it’s sort of like ‘Yelp for contractors,’ but our vision is to evolve it so it’s like a true marketplace,” Wei says of the company’s long-term plans for BuildZoom. “Our vision is to enable and support the actual transaction itself.” Right now, he says, after a homeowner and contractor connect, they go offline to discuss the details of the project, sign contracts, and handle changes. BuildZoom plans to bring those sorts of transactions online.

“We believe if we are really going to make this marketplace work better, and if we’re going to help consumers and contractors have a great experience, we have to get involved with the manner in which they structure the agreement and communicate throughout the traction,” Wei says. “All that stuff should happen in the cloud,” he adds.

Those statements sound very troubling from a risk management standpoint. I’m curious as to how BuildZoom will avoid liability when a contractor fails to complete work in a BuildZoom contract, or when work falls below the standard of care. Home Depot has had some issues in this area, as well…

Regardless, this is just another indication that the construction industry is ripe for innovation and disruption.

via TechCrunch