What Homeowner’s Must Know Before Hiring Any Home Improvement Contractor

You have decided to do a home improvement makeover for your home.  Maybe a small addition, new deck and some roof repairs, whatever it may be.  During the construction, all of a sudden one of the contractor’s employees falls off of the roof and is injured.  The next thing you know the injured employee is suing YOU for medical expenses and damages.  The worst part is they will probably win. That is why hiring a fully insured contractor is critical.

If you were not aware before, you will be aware now.  It’s not just sufficient for the contractor to show you a copy of his/her companies insurance certificate, you need one from the contractor’s insurance company that names you as an additional insured.  With the homeowner being listed as additional insured, the homeowner would then be notified about any changes to the policy.  These changes could be anything from the contractor decreasing his coverage, failure to pay premiums or possibly the contractor canceling the policy right after issuing you a certificate of insurance. Your contract should also include verbiage that full insurance coverage must be maintained for the complete duration of your project. Homeowners should also make sure they are aware of their current state laws concerning Worker’s Compensation. Some contractors are notorious for claiming their employees have all signed a Worker’s Compensation Release form. That may be true, but most states no longer acknowledge Worker’s Compensation release forms when there is an injury claim.

Most states require contractors to carry liability insurance along with workers compensation.  There are some contractors that circumvent that obligation immediately after the contract has been signed.  An additional form of insurance that you might seek is a policy that protects you from liens in the event the contractor fails to pay his suppliers or employees. Homeowners should request a state specific Wavier and Release of Liens form, from your contractor, suppliers and from any sub-contractors that were used on your project. Make sure you receive all Release of Liens forms before making final payment. Final payment conditions should also be included in your contract.

Of course the best insurance policy out there is free.  This would be the contractor’s references. Check with the contractor’s previous customers, his suppliers, sub-contractors and the various local regulatory agencies.  Any problem that shows up there will either bring peace of mind or raise great big red flags. Don’t forget to check with the Better Business Bureau as well.

Don’t get caught short by trying to be a “nice guy” and hiring a contractor just because he seems very nice and legitimate.  This is your home, your pocket book and your life that you are putting on the line.  Check, check and check again to make sure you have insurance coverage for any home improvement project where you hire a contractor.