If you hire a contractor for any type of work, one of the first things to ask him is to present a certificate of insurance. This important document is evidence that the contractor has insurance coverage in case people are injured or property damaged during work. The certificate provides details about the contractor, signatures and expiration date, name of the agent and contact information, type of coverage and the limits provided.
When you consider hiring a contractor then his insurance policy may make a difference between a highly professional and fake contractor, for every serious business owner should have a valid policy with workers` compensation insurance, general liability or public liability insuranceas well as insurance policies for every single subcontractor. The certificate should also be verified and issued by insurance agent that you may contact for further information about the coverage and to make sure if the insurance policy is properly renewed.
There are a few facts you need to know about contractor insurance should you decide to hire one for your project.
- One of the classic facts about contractor insurance is whether the employees, including subcontractors, have workers` compensation insurance. If any of the workers are injured on your property, you may be the one to pay for the medical costs, lost wages and rehabilitation in case the worker files the claim.
- Another classic fact you need to know is whether the policy has been renewed as you do not want the contractor policy to expire before the project is finished. If the contractor does not renew the policy regularly or has a history of cancellations then the insurance company may stop the policy.
- Some contractors are exempt from carrying workers compensation insurance in which case they are not allowed to hire anyone. This means that if they do hire workers who are covered through labor agency, if anything happens to them on your property, the agency may sue you.
- There are four types of general liability insurance with each one covering different aspects of business. In short, there are a few main types of general liability insurance for contractors(primary general liability, owners interest and lead umbrella liability). The cost of the insurance is determined by the liability selected and the type of work, income and payroll. The coverage limit of workers` compensation insurance depends on the payroll so it is important that contractors give true details to agents when applying for insurance policies.