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How to Protect Yourself When Hiring a Contractor

By Jerry Nicklow, API, AIS

If you’ve got some repairs to do for your home,  and plan on hiring a contractor to handle it for you, the beautiful job they do isn’t going to mean a thing if you’re tied up in a lawsuit.

Injured parties – like workers, neighbors, etc. – will come after you if your contractor isn’t insured properly.  So, here’s how to make sure.

  • BEFORE you even sign a contract or agree to have a contractor do work for you, insist on having a Certificate of Insurance.  (The contractor can get one in a flash from his/her agent.)  Not a policy, but a Certificate of Insurance showing current coverage in force.
  • Add wording to any signed contract that says should your contractor fail to keep insurance in force, he will lose the job and he will refund your deposit in full.  Then …
  • JUST BEFORE you allow the contractor to set foot on your property (which could be weeks after you sign an agreement), call the agent or company on the Certificate and verify the insurance is still in force.  It may have lapsed since the Certificate was issued.
  • Will your contractor employ labor on your job?  If yes, make sure he has Workers Compensation insurance.
  • Will your contractor employ sub-contractors?  If yes, get – and verify – Certificates of Insurance for them, too.  If they can’t produce them, then don’t let them work on your property.
  • Finally, don’t take insurance advice from a contractor!  We won’t tell you how to properly wire an addition to your home, and your contractor can’t tell you how insurance really works.  If you think anything seems fishy, call us and we’ll make sure your contractor isn’t putting you in jeopardy because of his poor insurance sense.

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