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Hiring A Contractor? First Check Their Contractors Insurance

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workers pointing to something on the construction site

It’s exciting to build or remodel. But, this is the time to keep a cool head. The decisions you make before you start building will have an impact on the whole project and beyond. Here is one of the most important: Never hire a contractor who does not have insurance.

Never

Why? Let’s find out why, and also whether they have the right kind of contractors insurance.

Follow The Money

The construction of a commercial or residential building can easily be the largest investment of your life. You might be tempted to hire the cheaper, uninsured contractor. However, cutting costs now could cost you more in the long run.

The uninsured contractor has no way of compensating when there’s a workplace accident or they fail to complete the work. Cost of damages will be for your wallet. Uninsured contractors expose you to financial risks that an insured contractor will have covered. If the contractor does something that damages the building or causes injures they’ll be liable to pay for it.

Do Your Research

But, do you really need to hire a construction company with contractor’s insurance. Isn’t your homeowner’s insurance good enough? No!  It’s nearly impossible to collect on a claim from your homeowners policy for defective workmanship or an unfinished project.

So it’s not enough to search for the right contractor. You also need to spend time understanding the insurance that will protect the project (and your finances). We can answer all your questions and steer you in the right direction.

Contractors Insurance Checklist

The contractors insurance must include the following coverage:

1. General Liability Insurance – This policy covers risks including bodily injury to you or other visitors to the site and property damage they may cause.

2. Builder’s Risk Insurance – This policy is specifically designed to protect buildings and structures that are being built or renovated. Not only does it cover the costs of construction it also covers the equipment being used in the construction project.

3. Workers Compensation – Workers Compensation is an insurance contract that an employer buys to protect its employee if they are hurt at work.

So, it is not enough to know that your contractor has insurance. You must also know that they have the right kind of insurance to protect both themselves and you.

Avatar for Tom Hester
Written by: Tom Hester
Tom has worked in the insurance industry since 2005, where he has become a source of knowledge. He’s gained a reputation as a writer. He has published a series of ebooks about insurance, like “A complete guide for Contractors Insurance and Handyman Insurance” and “Understanding Builders Risk Insurance.”