Before you hire a contractor to do work on your home or property, you need to make sure you’re covered for potential liability disasters that can easily become a nightmare for you and your family.
Know What Your Policy Covers
Before diving into any home or business renovation involving contractors, revisit your homeowner’s policy or your business insurance policy to see what the liability coverage has to say about injuries that take place on your property.
The information you specifically want to check involve the limits of your insurance and whether or not major injuries are covered (and just how well they’re covered if you do have coverage).
If you don’t know what your policy does and does not cover you could find yourself in an uncomfortable financial and legal predicament.
Also realize that while policies from one insurance company to the next may sound identical, that doesn’t mean they are. It’s in your best interest to understand exactly what your insurance provides at all times – especially when bringing contractors onto your property and into your home.
Make Sure Your Contractor is Insured Properly
It’s not enough to depend on your own insurance coverage to handle the overflow. Make sure your contractor has his own policy too – and that his workers are covered as a result.
Specifically, your contractor needs bodily injury coverage and property damage coverage that covers damage the contractor does to your property and/or your family. He should also have a substantial amount of workers’ compensation coverage for each employee. Don’t trust that he will have this simply because it’s required by law. Verify it by asking to see some sort of proof of this insurance.
Your contractor should also have coverage for accidents involving his equipment. Additionally, don’t allow the contractor to use your equipment (ladders and such) as you could then be held responsible for injuries resulting from falls or breakage of your equipment.
If your contractor has subcontractors, this diligence should extend to them when it comes to insurance information. The bottom line is that when injuries occur, blame rolls up to the last person who can possibly be held responsible. Make sure there is adequate insurance below you in order to reduce the risks of financial Armageddon from what started out as a simple remodeling or building project.
Limit Your Exposure to Risks
It all boils down to risks. While insurance is necessary for risk management, it is not infallible and should never be your only measure to avoid potential responsibility for injuries.
Remove potential hazards, keep risks minimal, and hire only reputable contractors with experience in the community.
Little steps like these go a long way towards preventing contractor liability nightmare scenarios. Use them wisely.
