Don't Get Blindsided on Insurance Coverage!

Insurance confusion is another area where homeowners become blindsided. Most homeowners assume that a contractor has all of the proper insurances needed to cover any  type of incident that may happen while they are on the job, but that’s not always the case!  Here are the two types of insurance you should be sure that your contractor has before setting foot on your property:

Liability insurance: This is how you will be reimbursed if there is damage that occurs on your property during the course of construction. Any contractor who is registered in the state of Pennsylvania is required to carry at least $50,000 in liability insurance, although the Pennsylvania State Attorney General recommends hiring a contractor with at least $750,000. That’s quite a big discrepancy, so it is important to air on the side of caution and choose a contractor with more coverage, rather than less. We actually recommend choosing a contractor with $1,000,000 in coverage, since in the event of a total loss of property, you want your contractor to have enough insurance to cover all of the damages that have occurred. 

Save yourself headaches by verifying adequate insurance coverage.

Worker’s Compensation Insurance: This type of insurance is required by law, and its purpose is to protect both the homeowner and the employee by covering the expenses of the injured worker in the event of an accident .  Although it is required, it is expensive, and many contractors skirt around the issue by hiring workers and paying them under the table. This can be extremely risky for you as a homeowner, because in the event that an uninsured worker is injured on your property, they can sue you for medical bills, lost wages, and even death! Yes, the probability is low, but the risk is high! Don’t expect your homeowners insurance to cover this type of injury either; in general most policies will not cover this because they have no way to verify whether you have hired a competent contractor to work on your home. To avoid a catastrophe like this, make sure that each person who steps onto your property is covered by Worker’s Comp. Ask the company that you are dealing with to put it in writing that everyone working on your property is covered by Worker’s Comp Insurance. Don’t just ask if employees are covered, ask about everyone that will be on the property, because some contractors will show homeowners paperwork stating that employees are covered, when in reality the people doing the actual work on your home are subcontractors, not employees.   If the contractor is not willing to sign off on this important issue, more than likely you will have uninsured workers on your property.