When planning to work with a contractor, insurance needs have to be given special consideration. It is essential to make sure that the contractor in focus has the necessary coverage. Even when you already have your own insurance, it could be of little use, if any, should a problem be caused by the contractor. Here are 7 tips you may find useful when working with contractors.
1. Ask for references
Prevention, they say, is better than cure. So why wait until a problem arise to file a claim? You could save yourself the stress by asking a contractor to supply references that can attest to their capability. Call these references to confirm and ask them if they have others you can also ask. You may also search for the contractor on the Better Business Bureau to see if there are complaints.
2. Use an adjuster
If what you are hiring a contractor for is to repair damage caused to your property by, say, a windstorm, you should use the adjuster assigned to your insurance claim to estimate costs of repairs. This estimate will enable you negotiate better with the contractor you may be dealing with.
3. Request for insurance information
You should ask to see the insurance information of the contractor to ascertain if they have the necessary coverage. The ideal contractor should have, at least, general liability and workers’ compensation coverage.
4. Check insurance company rating
It is not sufficient to be sure your contractor has insurance. You need to also find a way to check the financial rating of their insurance company. For example, you may need to be wary of companies with ratings lower than a “B,” especially when you are hiring a general contractor.
5. Ensure contractor is licensed
It is advisable to ask the contractor you are working with to show you their license before proceeding further. Some states have special websites for verifying contractors’ license numbers. In places such as California, unlicensed contractors may be treated as your employees if you engage them, in which case they can file a claim on the workers’ compensation policy you have taken.
6. Pay attention to subcontractors
Ordinarily, you should not have much to do with a subcontractor, if anything. But, if you still decide to engage a contractor without the necessary insurance, having similar subcontractors could put massive burden on you.
7. Keep a file
This is advisable when renovating your property after a damage incidence with respect to the filing of an insurance claim. The file will contain all supporting documents on work being executed.