Does your Contractor have Liability Insurance?

There are two very important questions you should ask when seeking to hire a General Contractor. The first and very obvious question is wether or not your contractor is licensed and qualified to do the work you're hiring him or her to do? The second and often the most important question is if your contractor has insurance.

Many times the second question is swept under the rug because we automatically assume that if the contractor is licensed that he/she has insurance. By failing to ask this question directly you may find yourself with an unnecessary headache and maybe even a lawsuit.

There are two types of insurance that a contractor should have; Liability and Workers Compensation Insurance. Since Liability Insurance is the more important of the two for any contractor that you hire let us explore it some more.

Did you know that you as the property owner must keep your property in a reasonably safe condition for everyone? If you invite someone to your home, such as a contractor, or whether it is implied that you have invited them, such as a delivery person, you must use regular care to protect them from unreasonable risks you may be aware of existing in your home or on your property. This include maintaining and inspecting your home and/or property, and doing what a reasonable person would do to keep it safe.

Accidents can occur at any time without warning. If an injury should occur you as the property owner could incur legal fees due to a lawsuit. Lawyers are paid at a minimum $200 for the initial consultation. Should your case go to court and you lose, you may not only be responsible for damages but your property insurance fees may be increased as well. Contractor liability insurance will help pay medical expenses, lost wages due to injury, and the cost of new equipment.

Many reputable contractors will tell you they have Liability and Workman's Compensation insurance. In order to protect yourself against loss or a lawsuit, should someone get hurt on your property, it is important that you ask to actually see a Certificate of Insurance before signing any contracts. All legitimate, insured contractors will be happy to present their Insurance Certification.

When viewing the insurance policy you need to take note of the insurance company. The amount of insurance the contractor is covered under, and most importantly the effective and expiration dates on the policy. Should the dates lapse before the work is completed a clause should be added into the contract for the work to stop until the policy is renewed and for payment to be held back. This will protect you and the contractor.

While accidents and other unfortunate events are rare when dealing with a qualified general contractor it is always good to know that you are covered by liability insurance just in case the unexpected does happen.

For more information on General Contractor Training, Licensing, or Insurance see 1GeneralContractor.com for tips on Bidding and choosing the right Training and Liscensing programs for General Contractors.