How do you know if your contractor has enough insurance? Any contractor can provide the minimum amount – and he should. Sometimes a contractor will have only the minimum insurance required to do business in that state. Think carefully about what that means to you. Of course, many jobs are accident-free, but what if they weren’t? That’s why good contractors go the extra mile. A responsible contractor will carry a $1 million to $2 million umbrella policy in addition to the state requirements. Why? Because he knows that if something happens, without the proper insurance, he will have to cover the damages himself. He’s experienced enough to know that the unthinkable can and has happened. A subcontractor can fall and break his leg on the job at your home. A pipe could burst and ruin your kitchen floor as a result of the plumber who is hooking up your remodeled bathroom fixtures. Who would pay for all of these damages if your contractor didn’t have enough insurance? You bet – YOU!
Ask for proof of insurance from your contractor. He is required to carry general liability insurance and worker’s compensation insurance. If he does not have the satisfactory paper work or proof of insurance, do not hire him. You might empathize with a builder who confesses he doesn’t have the appropriate insurance because he never could get on his feet long enough to make enough money to make payments on an insurance policy. Don’t be fooled. If the contractor can’t cover damage himself either by insurance or personally, you’ll end up paying for the damages. Check with insurance companies for contractors’ risk histories. Choose a contractor who thinks ahead enough to know that peace of mind is worth it.