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Why and How Your Contractor Must Be Insured

They say the devil is in the details. That is certainly the case when it comes to remodeling. One example is in the area of insurance. It is probably common knowledge that the contractor or contractors you hire to remodel your home should be insured but what exactly does that mean?

Contractors carry 3 basic types of insurance: vehicle, liability and workman’s compensation.

Everyone is familiar with the first type. It covers accidents to persons or property caused by or involving the insured’s vehicle(s). Your contractor should carry this type to protect you in the event that he injures you, someone else or property with a vehicle he owns, controls or utilizes while at your home performing the work you hired him for.

The second type protects you in the event that you, someone else or your property are damaged as the result of the contractor’s work. This would cover things such as a piece of furniture that is broken by the contractor while working in your home. It would cover the medical costs if your son stepped on a jagged piece of debris left lying around the work site. It would cover a neighbor who trips and falls over a cord or hose and is injured.

If there is an incident, the contractor may elect to pay the cost himself rather than make a claim against his insurance and risk a premium increase. Regardless, the insurance needs to be sufficient and current to cover any reasonably possible accidents.

It is also a good idea to be familiar with your homeowner’s policy regarding these types of incidents and you can always ask your agent if the certificate of insurance the contractor has provided you is adequate for your protection.

The third type of insurance is workman’s compensation. This type of insurance is intended to cover any injury sustained by someone working on your home. This type is a little more complicated.

In most states the owner(s) of the business is not required to carry workman’s compensation insurance on themselves. If they are injured on your job they could sue you and your homeowner’s insurance carrier.

If the contractor has a work comp policy, who does it cover? Is the owner covered if he is working on the job? What about the other workers who may or may not be his employees? The time to be sure you are adequately protected is before the contract is signed and the job is begun. All of this only becomes important of course if there is an incident. You have nothing to gain however but everything to lose if something drastic happens and you are liable.

It is always best to consult with an expert in loss prevention and insurance in the area in which you live.

Insurance

Insurance is a way to protect against financial loss. It involves paying a premium to an insurance company in exchange for the promise of payment or reimbursement for certain losses or damages. Insurance can help individuals, businesses, and organizations manage risks and protect against unexpected events.

There are many different types of insurance available, including:

Health Insurance: This type of insurance helps cover the cost of medical expenses, such as doctor visits, hospital stays, and prescription drugs.
Life Insurance: Life insurance provides a lump-sum payment to the insured’s beneficiaries in the event of their death. It can help provide financial security for loved ones and cover expenses such as funeral costs and outstanding debts.
Auto Insurance: Auto insurance provides coverage for damage or injury caused by a car accident. It can also provide coverage for theft, vandalism, and other incidents.
Homeowners Insurance: This type of insurance helps protect homeowners against damage or loss to their property, as well as liability for injuries or damage caused to others on their property.
Renters Insurance: Renters insurance provides coverage for personal property and liability for renters.
Business Insurance: Business insurance provides coverage for various types of risks that businesses may face, such as liability, property damage, and employee injuries.

Insurance policies can vary widely in terms of coverage, exclusions, and premiums. It’s important to carefully review any insurance policy before purchasing it and to understand what is covered and what is not.

Insurance companies use various methods to assess risk and determine premiums, including actuarial science, statistical analysis, and underwriting. Factors such as age, health status, driving history, and location can all impact insurance premiums.

In conclusion, insurance is a way to protect against financial loss and manage risks. There are many different types of insurance available, including health insurance, life insurance, auto insurance, homeowners insurance, renters insurance, and business insurance.

It’s important to carefully review any insurance policy before purchasing it and to understand what is covered and what is not. Insurance companies use various methods to assess risk and determine premiums, and factors such as age, health status, driving history, and location can all impact insurance premiums.