What Coverage Do You Need to Ask Your Contractor For?
Do you know who would have to pay the medical bills if your contractor fell through the ceiling while replacing your AC ducts? Are you sure? Continue reading to find out how insurance covers home improvement mishaps and what coverages you should make sure your contractor has.
Workers’ compensation is the main form of coverage that applies if a contractor’s employee is injured and has medical bills or loses income due to not being able to work. Kansas law only requires businesses to buy workers’ compensation coverage if they have more than $20,000 in payroll to non-owners. Since many contractors own their own small business, many don’t fall under this requirement.
The problem is that if they don’t have coverage on their own, they may try to claim that they were your employee and you were responsible for providing coverage. Or they could be more likely to try to find a reason to sue you for their injuries.
The safest thing for you to do is to make sure that any contractor who works on your home is covered by workers’ compensation whether or not they’re the owner.
Commercial General Liability
Commercial liability coverage kicks in if the contractor does something to someone else. For example, if they break a neighbor’s window or drop a paint can on your neighbor’s head, their liability policy will take care of any expenses.
If they don’t have liability coverage, you could be held responsible as the person controlling the contractor. An injured neighbor would usually have the right to sue both you and the contractor. If they chose to sue you, you’d have the right to recover from the contractor, but if they aren’t able to pay, you’d have to write a check from your own bank account.
Making sure the contractor has liability coverage gives you peace of mind that both you and your neighbors will be taken care of if something happens.
Commercial auto works much like general liability except it covers your contractor’s work vehicles. The reason this is separate from general liability coverage is that most general liability policies exclude auto claims.
You wouldn’t likely be responsible if the contractor had an auto accident on the street while driving to your property, but you could potentially be held responsible if something happens while they’re driving on or around your property while doing work. This coverage helps make sure there are no gaps in your coverage.
Builder’s risk coverage covers tools and materials used by the contractor during a project. It provides protection against things like tornadoes, fires, and theft.
Imagine you had a fire at your home that destroyed tools the contractor left overnight. The contractor would probably argue your house, your fault.
Builder’s risk coverage provides protection to avoid having to figure out fault or which separate insurance policy should apply.
Your insurance agent can help you figure out exactly what coverage to ask for and how to check the contractor’s insurance certificates. Your insurance needs will vary based on the type of project as some are more dangerous or more likely to affect your neighbors than others.
Integrity Insurance Agency has locations in Topeka and Burlington, Kansas. We work with local homeowners and contractors to make sure that everyone is protected in case of accidents during a project. Give us a call to learn more or to discuss your insurance needs.