When making improvements to your home, you will most likely need to hire a general contractor. Mistakes regarding their California contractors bond or contractors’ general liability insurance can end up costing you a lot of money if proper coverage is not in place.
Here are a few pitfalls to beware of with contractor general liability insurance:
Are your contractors licensed and covered by insurance?
“Are you insured and Bonded?” Should always be the first question to ask before hiring a general contractor. Hiring an unlicensed contractor may end up nullifying your home insurance in case anything goes wrong. Licensed contractors are listed by your local licensing board. All licensed contractor records are available for you to verify.
Does the policy run for the entire period of construction?
If your remodeling project is estimated to run for a couple of weeks, then your contractor’s policy should at least run for the same number of weeks. Otherwise, if anything happens after the insurance policy expires, then you will legally be liable for it.
In the same vein, the general contractor’s liability insurance should provide coverage in the event you have any issues with your home after remodeling.
Does the insurance policy cover injury and theft?
Construction sites are dangerous places. Damage can come in many different ways. The contractor’s general insurance policy should include possible injury to other people in the vicinity. For example, if a passer-by gets injured by a construction tool, then the insurance policy should be able to provide their compensation. If it does not, you, as the home owner, will be liable for it.
Similarly, the policy should protect you from losses in case of theft. This is very common on construction sites since there are usually many valuable items lying around.
You should also check whether the general contractor’s insurance policy covers their subcontractor and any damage to your property. In general, you need to find out what the insurance policy covers, and what you might have to account for if things do not exactly go your way.
Is the contractor’s liability insurance limit high enough to cover possible costs?
This is another question which many homeowners seem to ignore. The contractor may be covered by an insurance policy, but then have a very small insurance limit. You need to consider the cost of possible risks and find out whether you are taking in too much risk by hiring the said contractor.