Are you planning a remodeling project or addition for your home this year? Construction season is upon us, and it’s important to have the right insurance coverage. The Insurance Information Institute says if you’re hiring someone to do the work, be sure that the house, the contractor and the subcontractors have adequate insurance coverage.
Before the job begins an appropriate lawyer should handle the written agreement/contract between you and the contractor or sub-contractors, making it mandatory that the contractors include you as an additional insured on their general liability policy as respect to your project. In addition, the contractors must provide you with certificates of insurance evidencing General Liability, Workers Compensation and Umbrella coverage.
This is crucial, as most certificates of insurance contain the wording that additional insured’s will only apply where required by written contract or agreement. In the absence of a contract the additional insured status on the certificate will be of no value. If you are simply listed as a certificate holder and not an additional insured, the contractor’s policy will not extend Liability coverage to you!
In some home improvement projects, a General Contractor may subcontract work to other tradesman such as electricians and plumbers. The same requirements should extend to all subcontractors, as well.
When hiring contractors, make sure they have appropriate insurance that covers the type of work that they will be performing on your behalf and that they maintain adequate insurance limits to protect your financial interests. Be especially sure they carry workers compensation coverage, as this pays for medical and rehabilitation expenses and covers lost wages. Workers Compensation is mandatory in many states. If the contractor does not carry this coverage you may be held liable for injured workers.
You must contact your insurance agent or representative before construction begins in order to increase the insurance coverage on your house to an amount that reflects the higher value of the rebuilt structure. Don’t make the mistake of waiting until an addition or extra room is completed to increase the insurance coverage on the structure of your home. If the new addition is destroyed or damaged before insurance coverage has been increased, you may be responsible for the cost of repairing or rebuilding the addition. Unless your insurance carrier is notified of this change of condition, you might be in violation of the insurance contract and can jeopardize your insurance coverage.
Good luck in turning your home into your castle…but do it wisely and safely!