Global Courant
They say the devil is in the details. This is certainly the case when it comes to renovations. An example is in the field of insurance. It’s probably common knowledge that the contractor or contractors you hire to remodel your home should be insured, but what exactly does that mean?
Contractors have 3 basic insurance policies: vehicle, liability and industrial accident insurance.
Everyone knows the first type. It covers accidents to persons or property caused by or related to the insured’s vehicle(s). Your contractor should carry this type to protect you in the event that he injures you, someone else, or property with a vehicle he owns, drives, or uses while performing the work you hired him to do at your home.
The second type protects you in the event that you, someone else or your property suffer damage as a result of the contractor’s work. This would cover things like a piece of furniture being broken by the contractor while working on your home. It would cover medical costs if your son steps on a jagged piece of debris lying around at work. It would involve a neighbor tripping and falling over a cord or hose and getting injured.
If there is an incident, the contractor may choose to pay the costs themselves rather than making a claim with their insurance and risking a premium increase. In any case, the insurance must be sufficient and current to cover all reasonably possible accidents.
It’s also a good idea to be aware of your homeowner’s policy regarding these types of incidents, and you can always ask your agent if the insurance certificate the contractor provided you with is sufficient for your protection.
The third type of insurance is occupational accident insurance. This insurance is designed to cover damage incurred by someone working on your home. This type is a bit more complicated.
In most states, the owner(s) of the business is not required to carry occupational injury insurance for themselves. If they get hurt on the job, they can sue you and your homeowner’s insurance company.
If the contractor has work insurance, who will it cover? Is the owner covered while at work? What about the other employees who may or may not be his employees? The time to make sure you are adequately protected is before the contract is signed and the job begins. Of course, all this only becomes important when there is an incident. However, you have nothing to gain but everything to lose if something drastic happens and you are liable.
It is always best to consult with an expert in the field of loss prevention and insurance in the region where you live.
Why and how your contractor should be insured
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