Very good point. He did say he has the ability to buy insurance on a per-job basis so if I require it he could get insurance to cover just this job. If I hire him I will make sure he does this.

I would definitely require insurance, there is a boatload of things that could go wrong, and may not just as "The Kitchen Abode, Ltd" pointed out that includes personal injury. Better safe than sorry.

Not sure about your area, but tile installers aren't licensed in many places. If you feel that the insurance is a requirement, ask him to include that cost in his price quote.

Like stated above, the only main issue would be the lack of insurance. I would highly recommend that you require it!

Better safe than sorry. The "insured" part of it is very important.

OK, so with respect to the insurance, as far I can tell there are three types available to contractors: Business Owners, General Liability and Workers' Compensation (WC).

What should a tile setter have? He will have a helper but he's not an employee. Is worker's compensation insurance necessary or would this person be covered by a different insurance? Would WC even cover a non-employee worker?

I also don't think he technically has a "business" he's just a self-employed tile setter.

He is willing to get the insurance but neither one of us is really sure what he needs so that my butt is covered. Can someone help?

Those are all questions he should ask his insurance company. When he does get the insurance you can require he have his insurance company fax or mail to you a copy of his current insurance certificates. If he is not insured and something goes wrong, you could be liable for any injuries and damages which occur during the project.

Workman's Compensation lets you off the hook if he gets hurt on your project. Without it, you have to pay for any injury and if he slices off his hand while cutting tile he could end up owning your house.

Liability insurance covers him (and you) for any damages he may cause in the course of work.

Unlicensed, uninsured contractors (and yes he's a contractor) can and should do work cheaper because they don't carry the overhead and pay the taxes a licensed contractor does. While he sounds like a great guy and has made you a fair offer by not taking any money until the job is complete he's working "under the table" and that means he's "stealing" from those of us that operate a legitimate business. When your GC hires a tile setter then that tile man automatically becomes covered by the GC's insurances.