I am constantly in awe of my D.I.Y. (Do-It-Yourself) friends. When someone tells me he/she is going to spend the weekend putting in a new bathroom or replacing the kitchen cabinets, I really am simply amazed. I remember myself as a new, young homeowner stripping wallpaper only to realize I had stripped chunks of wall along with the paper. It took a contractor 2 days to rebuild those walls! Obviously I don’t have the knack for D.I.Y. home projects…and I’m sure I’m not alone. So what do we do if we’re D.I.Y.-challenged? We rely on contractors to do those jobs for us.
There are some insurance considerations we need to take into account when hiring a contractor. For example, are you protected as a homeowner if your contractor spills paint on your new Persian rug…or quits without finishing the work?
Whenever you hire a contractor, you need to be sure to verify his insurance; otherwise, you may end up being fiscally responsible for any damages. Your contractor should be covered for both general liability (to cover the cost of damages if the contractor damages your property) and worker’s compensation (to provide coverage if the contractor or one of his/her employees is injured while working on your property). Ask to see the contractor’s Certificate of Insurance!
According to Investopedia, a Certificate of Insurance is a document issued by an insurance company/broker that is used to verify the existence of insurance coverage under specific conditions granted to listed individuals. More specifically, the document lists the effective date of the policy, the type of insurance coverage purchased, and the types and dollar amount of applicable liability. Simply put, it is proof by the insurance company that the contractor has the appropriate coverage.
So, even if we aren’t all Do-It-Yourselfers, we can still get all of our projects done. We just need to make certain we are protected by ensuring our contractors have the proper coverage.
Feel free to contact your independent agent if you are unsure about the coverage in the COI.