This is a recommendation we always make to homeowners planning significant renovations – check your contractor’s commercial insurance. The simple fact is, if you don’t, your home insurance policy may have to kick in to pay for any losses that occur. How can your home insurance play a role here?
Here’s a simple example that’s happened plenty of times. You hire a contractor to add a new bathroom to your home or to finish out the attic. The contractor gets started, but a worker is hurt on the job. Perhaps the worker falls and suffers a broken bone. Or, the contractor causes damage to your home through poor workmanship. In situations like this, you want to know the contractor’s insurance is there to provide financial support if there is a need.
What should you know? How can you protect yourself?
What Type of Commercial Insurance Does a Contractor Need?
You may have heard recommendations previously to ask if a contractor is properly insured. Your goal should be to make sure the contractor is insured, but also that it is fully licensed. You want to see the Certificate of Insurance provided by the insurance company to the company as well. Take a look at some of the most valuable types of coverage these contractors should have in place.
Perhaps the most important step is to ensure the company has proper workers’ compensation insurance. This type of insurance covers the costs of worker injuries on the job, including at your home, if they are hurt while working. In Wisconsin, all employers with three or more employees must have this type of insurance in place.
General Liability Insurance
Commercial general liability insurance provides for help when the company is facing negligent claims. If the company, for example, makes a large mistake while planning or executing your project, this policy may help cover some of those costs.
Builders Risk Insurance
For larger scale projects, builders risk insurance is important. It can help provide some protection for the materials, fixtures, and equipment used on the job.
Commercial Auto Insurance
Most contractors operate vehicles as a component of the job. Most have a large amount of equipment or tools in them. But, what happens if the tools are stolen while the car is parked on your property? This type of insurance may help cover those losses.
What Your Steps Are
As you work to hire a contractor for your project, take a step back. If you focus on just a few things, you may be able to avoid some of these risks.
#1: Know Who You Are Hiring
Learn about the company’s reputation and ability to meet your needs. You want to review the type of service they offer, their workmanship, and any information from previous clients. Look at pictures to see the differences when possible.
#2: Make Sure You Verify the Insurance
Call your Madison, WI home insurance agency to find out if the company has coverage. Our team can help to verify this information for you. We can work to make sure the coverage is adequate for your risks. Be sure to check that the policy is up to date, too.
#3: Let Us Update Your Existing Policy
Finally, you need to be sure your home’s insurance policy is up to date after your project is up to date. For example, a new home addition adds value to your home. Our team works closely with you to make sure your policy matches the value of your home.
At Homewood Insurance Agency, we are happy to help you find the policy you need. Making sure your contractor’s insurance is up to date, and right for the project is essential.