What Insurance Should My Builder Have?
Much like any other type of business professional, insurance coverage is needed to adequately protect the insured from claims that might arise. Being a contractor means that some hazardous work could be performed. It is important as a customer to make sure that your contractor is properly insured. Otherwise, you could be facing out of pocket charges on claims that aren’t your fault. What kind of coverage is needed and how can you make sure that your contractor is covered?
The type and level of insurance required for contractors is typically a bit more involved than other business professionals. This is because contractors are often on the job site, using equipment and materials that could cause injury to themselves or others. That’s why it’s important for companies to have workers compensation insurance as well as liability coverage in case an accident occurs.
The following guide will assist you in making the smartest decision on your contractor selection.
What Kind of Coverage Should a Contractor Carry?
Premierline explains that public liability insurance is what a contractor needs in order to protect against potential damage to a customer’s property. The coverage is also meant to protect contractors in case a client decides to take legal action. Understandably, this is an essential policy for your contractor to carry.
Employer’s liability, or workman’s comp, is another important policy. If the contractor employs individuals, this coverage is meant to protect against work-related injuries. A way that a contractor would bypass obtaining this coverage is if he did not have any employees, or if he only used sub-contractors.
Contract Works is the next type of coverage that is applicable to contractors. It protects the projects that are currently under construction. When a dwelling is under construction, you never know what might happen to it in its vulnerable state. This is a unique type of coverage that is important to contractors in particular.
Another optional coverage is for tools and equipment. While it is not as important to the client, it helps to protect the tools that a contractor needs to use on the job. Most contractors would not be able to work if their tools got lost or stolen, so this type of policy is optional yet preventative.
How Can You Ensure Your Contractor Has Insurance?
Being able to see proof of insurance from your contractor is within your right as a customer. The best way to go about this is to ask them for a certificate of insurance. This is a paper that shows you all of the policies that the insured has in place. If they are using a few different brokers, it might be a few pages. These certificates will also show you the coverage amounts that are in place for each policy, an easy way to determine if you are comfortable with the level of protection they are insured with.
Sometimes, the contractor might now have a certificate on him. You can then ask his carrier directly for the proof. All you need is the business name and policy number. Explain that you are a customer who is about to get renovation work done. While it isn’t mandatory to ask for a certificate of insurance, nor to carry one at all times, Trusted Choice recommends that you ask any contractor who you will be working with for a certificate. There are many risks involved that are beyond human control, so it is better to be prepared. Imagine not asking for the proof of insurance and then a claim were to arise halfway through the work. You would be left paying out of pocket to fix the damages with an incomplete project. Having the certificate in hand will give you the peace of mind that you need.
How Do You Hire a Contractor?
Citizens Advice suggests that you take a look at a contractor’s references before making your decision. This person, and maybe their team, will be working on your home or business for an extended period of time. You need to make sure that you trust your contractor during this renovation. An open line of communication is important; you should be able to ask any questions that you have or mention any concerns. If you feel that you don’t understand something, your contractor should have no problem breaking it down for you.
By taking a look at some references and reviews, you should be able to get an idea of the experiences that other individuals had when working with the contractor. If you are able to reach out to the person directly, you can even ask what kind of work was performed and how long it took. In many cases, you likely know a friend or family member who has had construction or renovation done. Getting references from a loved one can save you the time of looking through reviews.
At the end of the day, you must use your best judgment to make your decision. As long as your contractor is properly insured and reliable, you should have a successful renovation project to look forward to. Being educated on the different types of insurance coverage that a contractor should have will take the guesswork out of your hiring process.
