Is your contractor adequately insured?
(www.cslb.ca.gov)
This small little chore can save you years a grief. Check out the contractors you are considering and their team. You my be surprised at the information you can learn.
Although many homeowners are unaware of the potential ramifications of this critical issue, insurance coverage should be one of the most important considerations in your choice of contractor. Making the mistake of choosing a contractor with inadequate insurance can have costly consequences to your property, your family and your financial well-being. Unfortunately, some contractors disregard this risk and, by cutting corners on insurance, are able to offer lower prices. In most cases, a lower price means the contractor may be uninsured or under-insured.
The California Contractors State License Board (CSLB) cautions homeowners that some contractors do not carry adequate insurance. In the CSLB publication “What You Should Know Before Hiring a Contractor,” the Board recommends that consumers verify that a contractor has workers’ compensation and liability insurance coverage, and advises:
“Ask the contractor if the company is insured against claims covering workers' compensation, property damage, and personal liability in case of accidents. Ask to see a copy of the certificate of insurance, or ask for the name of the contractor's insurance carrier and agency to verify that the contractor has the insurance.
In California, if a contractor has employees, workers' compensation insurance coverage is required by law. This is important for you as a homeowner. If a worker is injured working on your property and the contractor does not have insurance, you are the one who will have to pick up the bill for medical attention and rehabilitation, if necessary. Don't let your homeowner's insurance policy become your contractor's liability coverage.”
However, contractors are not required by law to carry Commercial General Liability Insurance. And in order to cut costs and increase profits, many do not have this insurance. CSLB offers the following advice on this subject:
“The Contractors State License Board strongly recommends that all contractors carry Commercial General Liability Insurance. This insurance protects against third-party bodily injury and accidental property damage. Some contractors do not carry this insurance. The Board recommends that you evaluate the risk to your family and property when contracting with a contractor who is not insured.”
- From the CSLB Publication “Home Improvement Contractors and General Liability Insurance,” available online at: http://www.cslb.ca.gov/forms/hicgenliabfacts.pdf.