Using Contractors Insurance Wisely


Certain misconceptions exist on contractor general liability insurance, with some thinking that it is a form of warranty, which it is not. A construction job, of course, for those who are not handy with tools isn’t easy. Thus, many homeowners would call a contractor to do some house repair work and pay upon having seen a satisfactory job done. If the work delivered is unsatisfactory, the contractor can be rightfully recalled by a homeowner to redo the repair. There is no possibility of an insurance claim here because it can only be triggered if damage or injuries resulted from the poor workmanship.

To illustrate, a roof installer with a general liability insurance repaired your home and put up new gutters. But instead of using the correct spikes, the handyman cut corners and used some super adhesives for the job. When a thunderstorm strikes shortly after, the gutter collapsed from the rush of rainwater and part of the faulty structure slammed and shattered one of your windows. The roof contractor’s insurance will pay for the window but expect that it won’t shell out a single cent installing the gutter back.

Here’s an expanded example. You call over a fully insured HVAC company for a new duct work in the basement of your home. By some misfortune, the duct soon pries off and hits and injures a member of your household, say a live-in maid. The clean up and repair of the damaged drywall will be covered by the HVAC’s insurance. It will also pay for the maid’s medical bills and any of her lost wages resulting from the injury. However, you will have to pay for the new duct work or repair.

This general liability insurance is simple stuff actually. But still, there are some misconceptions among laymen. To emphasize, the insurance of contractors isn’t a warranty for their work; it’s just some sort of safety net. It is important to note too that negligent errors or deliberate acts are not typically covered by contractor insurance.

For homeowners then, it is wise to ask for a certificate of insurance with a general liability policy from a prospective contractor for work on their property. Even a handy man will still need this coverage, plus a state exemption on workers compensation. Checking on contractor insurance liability will enable homeowners to avoid being on the hook for injuries sustained while there is work ongoing in their property.

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