Reduce The Risk and Always Verify!
Luckily, there’s a simple way to reduce the likelihood that a mistake or oversight on the part of your contractor will lead to serious financial loss for you:
“Verify insurance coverage”
Contractors liability insurance is really a necessity
This insurance will cover the contractor from legal expenses if you have to sue.
Each individual policy can differ significantly.
Most policies will provide the contractor with protection from property damage, slander, libel, product liability, slips and falls, and body injury to someone who is not your employee.
Inquire Before You Hire
Never assume that a contractor has business insurance. As you shop around, ask about each prospect’s insurance coverage.
Contractors can prove that they’re covered by showing you a Certificate of Liability Insurance.
But be forewarned: A certificate does not equal coverage.
Make the Call
Once you’ve seen the certificate, it’s up to you to verify that the contractor’s policy has not expired. You can do this by calling the agent listed on the certificate.
An expired insurance policy is the same thing as no coverage at all.
Here’s Bottom Line
If your contractor has insurance and makes a mistakes that causes damage to your home… its a headache.
If your contractor is without insurance, those mistakes become a nightmare of repair costs, property damage and more.
Always verify insurance before signing a contract.
Do not rely on your homeowner’s insurance
Your homeowner’s insurance policy will not cover damage caused by a contractor.
You invited that contractor into your house, so the insurance company classifies the damage as intentional.
There is one caveat here:
You can update your homeowner’s policy prior to starting a renovation project to protect yourself against certain risks the project presents.