How to Protect Yourself When Hiring a Contractor
Essential Steps to Protect Yourself When Hiring a Contractor
Hiring a contractor to handle home repairs or renovations can be a daunting task. While a well-done job can enhance your home’s value and aesthetic appeal, it won’t mean much if you end up in a lawsuit due to improper insurance coverage. To protect yourself, follow these steps to ensure your contractor is fully insured before starting any work.
1. Get a Certificate of Insurance Before Signing a Contract
Before you even think about signing a contract or agreeing to have a contractor work on your property, always insist on seeing a Certificate of Insurance. This certificate is a document provided by the contractor’s insurance agent, proving they have current coverage. Don’t settle for just a policy or verbal assurance—ask for the actual certificate that confirms the insurance is in place.
This certificate will outline the types of coverage the contractor has, including general liability insurance, which is crucial in case of property damage or injury. A properly insured contractor will have no problem providing this document promptly.
2. Include Insurance Clauses in Your Contract When Hiring A Contractor
When drafting your contract, add specific wording that protects you if the contractor’s insurance lapses. For instance, you can include a clause stating that if the contractor fails to maintain insurance coverage, they will lose the job and refund your deposit in full. This gives you an extra layer of protection and ensures the contractor takes their insurance obligations seriously.
3. Verify Insurance Before Work Begins
Even if you’ve seen the Certificate of Insurance when signing the contract, don’t stop there. Just before the contractor starts work on your property, which could be weeks after signing the agreement, contact the insurance agent or company listed on the certificate to verify that the insurance is still in force. Insurance policies can lapse, and you don’t want to find out too late that the coverage expired.
4. Ensure Workers Are Covered by Workers’ Compensation
If your contractor plans to hire labor for your project, make sure they have Workers’ Compensation insurance. This type of insurance covers medical expenses and lost wages for workers who might get injured on the job. Without it, you could be held liable for any injuries that occur on your property.
5. Check Insurance for Subcontractors
Contractors often hire subcontractors to help with specific parts of a project, such as plumbing or electrical work. If this is the case, request and verify Certificates of Insurance for each subcontractor. If a subcontractor doesn’t have proper insurance, they shouldn’t be allowed to work on your property. This step ensures that all parties involved are adequately covered, reducing your risk of liability.
6. Get Expert Insurance Advice
Lastly, never take insurance advice from your contractor. While they may be skilled at their trade, they are not insurance experts. If anything about the contractor’s insurance coverage seems unclear or insufficient, contact your insurance agent at Huff Insurance for advice. Our team can review the contractor’s insurance and make sure you’re not left exposed to any risks.
7. Here are several types of contractors you might consider hiring for different projects:
Here are the common types of contractors that you may be looking to hire. Each contractor will have different insurance needs, so it is important to talk to your insurance agent when hiring a contractor.
- General Contractor – Manages overall construction projects.
- Electrician – Specializes in electrical wiring and systems.
- Plumber – Handles plumbing installations and repairs.
- Roofing Contractor – Installs and repairs roofs.
- HVAC Contractor – Works on heating, ventilation, and air conditioning systems.
- Landscaping Contractor – Designs and maintains outdoor spaces.
- Carpenter – Focuses on woodwork, framing, and custom furniture.
- Painter – Specializes in interior and exterior painting.
- Masonry Contractor – Works with brick, stone, and concrete.
- Flooring Contractor – Installs and repairs various types of flooring.
- Paving Contractor – Installs and maintains paved driveways and surfaces
- Drywall Contractor – Installs and finishes drywall.
- Remodeling Contractor – Specializes in home renovations and remodels.
Conclusion When Hiring a Contractor
By following these steps, you can protect yourself from potential legal and financial headaches when hiring a contractor. Ensuring that your contractor is properly insured will give you peace of mind and allow you to focus on the success of your home project.
