Before you hire a contractor to help you remodel your home or do any other work on your property, it’s extremely important to verify that the contractor and all his or her employees are covered by general liability insurance and workers’ compensation insurance.
Insurance shouldn’t be the only concern, of course. You’ll also want to examine what kind of warranty your contractor will offer for his company’s work and you should check out his or her reputation. Hiring an insured contractor means you’re getting a real professional, not a jack-of-all-trades who might not be up to the specific task you need completed. Otherwise, it’s kind of like going to the dentist and finding out that the hygienist is out and your teeth will be cleaned by someone who specializes in billings.
Following are some frequently asked questions about contractors and their insurance:
How do I find out if my contractor is insured?
Before you sign a contract, request the name of your contractor’s insurance agent in order to verify that he is covered. You should ask to see a Certificate of Insurance that lists the effective date of the policy, the type of insurance coverage carried and the types and dollar amounts of applicable liability.
It’s important to check that the policy will not expire before your contracted work is completed.
How can I verify my contractor’s insurance information?
It’s definitely a good idea to run the contractor’s proof of insurance past your own trusted insurance agent to make sure it is sufficient in the event an accident occurs on your property. A licensed agent is best qualified to review the coverage limits and specifics of the policy to help you determine exactly what kind of risks you should be protected against. If the contractor’s policy does not include a sufficient amount of coverage, your agent may recommend increasing your own liability coverage to offer extra protection in the event a worker is injured severely on your property.
You’ll also, by doing this, make sure that your agent and your insurance company know about the renovations you’re doing. Some renovations could greatly increase the value of your home, meaning you’ll need more dwelling coverage – the part of your homeowners policy that protects the physical structure of your house against specified perils. The dwelling coverage should be equal to the amount it would take to replace your home should it be destroyed by a covered peril.
What should I be protected against?
Your licensed agent should recommend checking that your contractor is covered with general liability insurance and workers’ compensation insurance.
General liability insurance offers protection in the event a contractor accidentally causes damage to your property or the property of a neighbor. Rather than having the costs to repair the damage come out of your pocket, the contractor’s insurance should cover it. If your contractor’s ladder falls and breaks a window, you shouldn’t be held responsible to picking up the tab.
Workers’ compensation insurance offers protection in the event one of the contractor’s employees is injured on your property. If an employee falls off the ladder or has an accident with a piece of machinery, you shouldn’t be held responsible for the resulting medical bills and treatment.
Standard home insurance policies typically do not cover accidents involving contractors, which is why it’s important to verify your contractor’s coverage before signing on the dotted line. It may be a good idea to review the liability coverage in your homeowners insurance policy as well. Work with a licensed agent to find out exactly what kind of risks you’re covered against and exactly what kind of additional coverage you’ll require when you hire a contractor.
This article was contributed by Kelly McMurtrie, a writer for www.insurancesolutionsplus.com. Kelly has been writing content for www.insurancesolutionsplus.com and other major brands since 2011 after graduating from the University of South Carolina with a B.A. in Media Arts.