My favorite blog, Lifehacker, recently had an article called "How to Hire a Contractor Without Getting Hosed".  In the article, one of the recommendations was to check out the contractor's insurance.  I cannot stress enough the importance of making sure anyone you hire has insurance.

Let's look at what a contractor's insurance covers.  His liability policy covers for bodily injury and property damage that arises out of the work that he does.  For example, a painting contractor comes to your house to paint your living room.  In order to paint the room, the contractor needs to move the furniture in the room.  In the process, he scratches up your wood floors.  This is property damage and is a payable claim under the contractor's policy.

But his policy (and liability) doesn't stop when he leaves your house.  He also has something called Completed Operations.  His liability for property damage and bodily injury is still protecting you in the event something happens after he's gone.  Let's say you have a plumber come in to replace a pipe and a couple of weeks later the pipe burst in the middle of the night.  You wake in the morning and step in 2 inches of water.  It's time to call in a claim.

There are some things you need to know before you call in any claim against a contractor though. 

• The policy does not pay for poor workmanship.  If you don't like the work the contractor does, you cannot call in a claim hoping to get money to hire someone else. 
• The contractor has to be legally liable.  In the plumbing example above, if the contractor did the work and the pipes burst because of the cold, then this would not be a valid claim and most likely would be denied.

Here are some recommendation regarding insurance for contractors:

• Ask the contractor if he has insurance.  If he says yes, ask him for a certificate of insurance.
• Call up the agent who handles his insurance (it's on the certificate) and tell them the kind of work the contractor is doing for you and ask them if that work is excluded.  This is especially true for remodeling contractors as their policies generally exclude roofing.
• Ask the agent if their insurance is current.
• Ask the contractor if he is using subcontractors.  If he is, find out which ones are doing the work and ask for certificates of insurance for them.
• Keep the certificate(s) in a safe place.  They are your insurance should they damage something or someone.

Don't go easy on the contractor on this.  Not getting a valid certificate of insurance means that if something happens, you're left with the bill to fix the damage.

If you're looking for contractors with proper insurance, give us a call at 210.521.4545.  Our agency has several reputable contractors who we insure.  And we make sure their insurance covers both them and you properly.