So, you’re in the process of hiring a contractor for a project at your home or property. You’ve found the right professional for the job, but before signing any contract, there’s still one last step - always verify that they’re insured.
When you hire a contractor, no matter what the job is, it is important to make sure they have insurance for them and their employees. This will prevent you, the homeowner, from potentially being financially responsible for any accidents or damages that might occur during the project.
Here are some questions to ask a contractor to verify that they have insurance:
Can I see your proof of insurance?
When you hire a contractor, the best method to determine whether they are insured is by simply asking to see proof of insurance. If the contractor is insured, they shouldn’t have any problem giving you this information.
Is the insurance is still valid?
Even if the contractor shows you their proof of insurance, be sure to read it over carefully to make sure it’s up to date. Remember, even if the contractor is insured when they start your project, as soon as the policy expires, you are not protected from potential negligence or damage on your property.
For further verification, you can call the agent listed on their proof of insurance to confirm the information is accurate.
What type of insurance does the contractor carry?
Different jobs require different types of insurance and/or additional coverage. Always verify the type of insurance your contractor has. Generally, there are two types of insurance the contractor might have:
General Liability Insurance General liability insurance is the most common type of insurance contractors carry. This insurance covers the cost of repairs for any accidents that damage your property.
Workers’ Compensation Insurance Workers’ compensation insurance is required even if the contractor has just one extra employee or an entire crew. Workers’ compensation ensures that you aren’t liable for any costs associated with any injuries employees may face while on a job site.
Will there be subcontractors on this job? If so, are they covered too?
Sometimes, your contractor will need to hire out the services of a subcontractor. Subcontractors typically specialize in areas like plumbing or electrical work, and complete parts of a project that general contractors cannot do themselves.
Make sure to ask the contractor whether any subcontractors will be used on your project. If so, ask whether the subcontractors will be insured under the general contractor’s insurance, or if they have their own. Follow the same steps to verify a subcontractor’s proof of insurance.
Can we sign a written contract?
Any insured and reputable contractor should have no problem entering into a written contract for a project. A contract can be as simple as a signed piece of paper stating that the contractor is covered by liability insurance and, if needed, workers’ compensation insurance. Contracts can also ensure that the general contractor fulfills all the duties required for a job.
If the contractor does not want to engage in a written contract, move on to another contractor. Stand your ground on this. Contracts protect you against potential fraud, legal, and financial liability.
Typically, a written contract should be used for any job. While handshake deals sound great, from a legal and financial standpoint, they offer you no real assurances or protection.