Maybe. Until the cigarette he’s smoking gets flicked onto the shingles and smolders there until it ignites. Or the local building codes are violated and your slapped with a stop-work order. Or the cut-rate work fails miserably in the first rainstorm and your attic and upper floor are water damaged and uninhabitable.
Then, if that “family friend” did not have liability insurance and the proper permits and licensing, the onus for repairs and legal hassles are most likely on you.
In addition to permits and licenses, two kinds of insurance need to be verified anytime you consider hiring a contractor to perform work on your property:
- General Liability Insurance. This insurance covers damages if the contractor’s accident or error causes damage to your property or a neighbor’s property.
- Workers’ Compensation Insurance. This insurance will provide coverage if the contractor’s employee is injured while working on the job at your property.
In the absence of either insurance, you may be financially responsible if an accident or injury occurs while the contractor is working on your job.
Before signing a contract, tell the contractor that you need to verify insurance coverage. Request the name of the contractor’s insurance agent and contact the agent to request a Certificate of Insurance. As an extra precaution, don’t just call the name and phone number provided by the contractor. Instead, look up the insurance agent in the phone book and call the listed number to request the certificate of insurance.
You want to trust the contractor. Most times, you can. However, “trust but verify” is always good policy. Reputable contractors are pleased to provide information to help you verify their insurance coverage. In fact, they usually appreciate you asking, because they must compete on price with “fly by night” contractors who operate without the expense of insurance.
In addition to verifying that the contractor carries liability insurance and workers’ compensation insurance, you should determine exactly what coverage you have on your own homeowner’s insurance. Would your homeowner’s insurance cover you if the tree being cut down by the contractor falls on your neighbor’s car or home and does extensive damage?
Frequently, homeowners’ insurance policies do not cover contractor accidents. This makes it especially important for you to verify that the contractor has adequate insurance.
If contractor accidents are not covered under your current home insurance policy, you may want to ask your insurance agent whether your insurance company offers additional coverage to cover contractor accidents. Find out the cost of this additional coverage. The peace of mind that would come with adding this coverage may be worth the cost. Please contact Mountain Lakes Insurance if we can help you understand your home insurance, or if you are a contractor interested in general liability or worker’s compensation insurance.