Proof of Insurance
Don’t be afraid to ask the prospective contractor to provide certificates of insurance. This is simply smart business, so the contractor should not be offended when you make such a request. Having the certificate mailed or emailed directly from the contractor’s insurance agency is the best way to be sure that the insurance certificate is valid and the coverage listed is in force. I the contractor prospect can’t provide you with this information or seems unwilling to do so, move on to the next one.
Worker’s Compensation
As the property owner, you are financially responsible if a worker is injured on the your project and his employer does not have worker’s compensation coverage. Be sure that any contractor you hire has worker’s compensation if he has employees. If the general contractor has coverage, his insurance will also protect subcontractors’ employees. the safest policy is to ask the general contractor to furnish proof that his subcontractors have worker’s compensation. This information should be made readily available to you.
General Liability Ask about the general liability limits the contractor has. You should require that the limits be a minimum $1,000,000/$2,000,000 with at least a $1,000,000 umbrella or an excess liability policy. Ask the contractor if he has any claims pending or situations that might develop into claims. Policies today are written with a “per occurrence” limit and a policy year limit. If there are other claims pending or likely to develop you might not have the protection you expect. Ideally, you want the liability policy to be an “occurrence form”, not a “claims made” form. The occurrence from gives you the best chance of recouping a future loss.
