Spring has FINALLY arrived and I saw a lot of work going on around town this past weekend. Tree trimmers, landscapers, Pool guys and homeowners were out in full force getting ready to kick off the spring season. We get this insurance question a lot so thought this was a good time for a post on why you should ask workers for proof of insurance.
When doing business with someone else, it is crucial to know whether that person is insured or not. Asking this question is very important. If a service worker such as a gardener, arborist or contractor does not have insurance and causes damage on a homeowner’s property, the homeowner may be on the hook to pay for it. The same is true if an uninsured worker is injured. Hired workers who do not carry insurance tend to be less responsible than those who do, so asking about coverage is also a good way to determine whether someone will be a reliable worker. It is always best to pay a little more for someone who is insured than to take the risk of hiring an uninsured worker.
Avoid taking a person’s word if he or she says there is insurance. A verbal confirmation will do no good if the person is actually injured while being uninsured. Ask the individual to have his or her broker send a certificate of insurance. If the broker sends it via email or fax, then the policy can be verified. In some cases, smaller firms may try to convince homeowners that insurance is not necessary. Avoid falling for this lie, because it is a common trap used by amateurs to convince homeowners to buy services or products that are usually poor quality. In addition to this, damages or inadequate services will have to be compensated for out of pocket due to lack of insurance.
The following are some examples of types of workers and services a homeowner should request insurance certificates for:
– Installation or repair services for home, business or automobiles.
– People who have a lease or rental agreement with the homeowner.
– Contractors hired to work on commercial or home remodeling projects.
– Independent contractors or contract-based employment agreements.
– Professionals such as mortgage brokers, staffing firms, CPAs and consultants.
– Housekeepers, gardeners, maids and other service contractors.
Contractors and carpenters should have a general liability policy or CGL that is designed for their field of work. Professionals such as CPAs and consultants should carry professional liability insurance, which includes errors and omissions coverage. Hired workers should also carry workers’ compensation insurance. This is especially important if they will be bringing in a sizable crew of their own workers to complete a project. If vehicles will be used on the job, ask for commercial auto coverage as well. Whether or not to request insurance proof for every service agreement is a decision each homeowner must make. However, it is especially important to purchase coverage when paying large sums of money for jobs. Also, consider the type of job and potential for injuries. To learn more about these types of insurance, discuss concerns with an agent.