When hiring a contractor for a job, it’s important to know whether they are a contractor or an insured professional. Many people assume that all contractors are licensed, bonded, and insured, which is not the case.

Knowing the difference between the two can help you protect your rights, especially in case of damages or injuries. Here’s what you need to know:.

The Differences between Contracting and Insurance

Contracting refers to hiring a person or a company to complete a specific job. This could be anything from building a fence to full construction. The contractor typically provides the labor, materials, and equipment necessary to complete the job.

A contract outlines the scope of work, the timeline, and payment terms.

Insurance, on the other hand, refers to a financial product that protects individuals or businesses from liability for damages or injuries. It can cover a wide range of risks, including property damage, bodily injury, professional liability, and more.

There are many different types of insurance policies available, and each has its own set of terms and conditions.

Why Insurance Matters

When hiring a contractor, it’s important to know whether they are insured or not. A contractor who is not insured may be cheaper upfront, but they can end up costing you a lot more in the long run.

If the contractor damages your property or causes injuries, you may be liable for the costs. On the other hand, if the contractor is insured, their insurance will cover the damages or injuries, saving you both time and money.

Additionally, hiring an insured contractor gives you peace of mind. You know that if anything goes wrong, you’re covered. This can make the entire process less stressful and more enjoyable.

Types of Insurance for Contractors

There are several different types of insurance that contractors can have, including:.

General Liability Insurance

This type of insurance covers property damage or injuries caused by the contractor while working on the job.

For example, if the contractor accidentally damages your neighbor’s fence while working on your property, this insurance will pay for the repairs.

Worker’s Compensation Insurance

This insurance covers the contractor’s employees if they are injured on the job. If one of the contractor’s employees falls off a ladder while working on your property, this insurance will cover their medical expenses and lost wages.

Professional Liability Insurance

This insurance covers the contractor for any errors or omissions made while working on the job. For example, if the contractor installs a faulty appliance that causes a fire, this insurance will cover the damages.

How to Verify Insurance

Before hiring a contractor, it’s important to verify that they are insured. Here are a few steps to take:.

Ask for Proof of Insurance

Ask the contractor to provide a certificate of insurance that shows the type of coverage they have, the policy limits, and the expiration date. Make sure the certificate lists you as the certificate holder.

Contact the Insurance Company

Contact the insurance company listed on the certificate to verify that the insurance is valid and up-to-date. The insurance company should be able to confirm the policy’s coverage and limits.

Check for Exclusions

Make sure to read the policy closely for any exclusions or limitations that may impact your project. For example, if you’re remodeling a historic building, the insurance policy may not cover the cost of any damages caused by your renovations.

Conclusion

Knowing whether your contractor is insured or not is critical when hiring someone to work on your property. Don’t be afraid to ask for proof of insurance and verify the policy with the insurance company.

Make sure both you and the contractor are protected in case of any accidents or damages. By taking these steps, you can avoid costly mistakes and protect your rights during any construction project.