You’ve wanted to renovate your cramped, outdated kitchen for ages. And now – finally – you have the funds and the opportunity to do it. So you ask around among your friends and co-workers to find a contractor and then hire the one they recommend – even though you’re not aware that you need to or even how to make sure your contractor is insured in COLUMBIA. But with a huge helping of good luck, the renovation goes smoothly, and you are delighted with the results.
But it could have been different – appallingly different – if your contractor wasn’t insured and luck hadn’t been on your side. That’s why you see so many television shows now that depict the making right of botched jobs by shady contractors. You can avoid such a situation, however, by making sure your contractor is reputable and fully insured.
Difference Between Bonding and Insurance
Most reputable contractors advertise themselves as “bonded and insured.” But what, exactly, does that mean?
A surety bond assures that you’re protected if the contractor skips out and doesn’t finish the project or if he winds up doing sub-par, shoddy work. This bonding ensures that you won’t have to use your own cash or homeowner’s insurance to foot the bill in such cases.
A contractor’s insurance protects you against the cost of both damages and lawsuits. If during the renovation project, some kind of damage occurs to your home, you (or your insurer) won’t have to pay for repairs. Also, if one of the contractor’s employees is injured working on your project, you won’t be liable.
When reputable contractors advertise themselves as “bonded and insured,” it means they have taken specific measures to protect their clients and ensure their reliability. Being bonded involves having a surety bond, which provides a financial guarantee that the contractor will fulfill their obligations. If the contractor fails to complete the project or performs substandard work, the surety bond ensures that you are protected. This means you won’t have to use your own money or homeowner’s insurance to cover the costs of unfinished or poorly executed work.
On the other hand, a contractor’s insurance offers protection against the cost of damages and lawsuits. During a renovation project, if any damage occurs to your home, the contractor’s insurance will cover the repair costs, so you or your insurance policy won’t be financially burdened. Additionally, if one of the contractor’s employees is injured while working on your project, the contractor’s insurance will handle the liability. This means you won’t be held responsible for medical expenses or any legal claims that might arise from such injuries. Together, being bonded and insured provides a comprehensive safeguard for homeowners, ensuring financial security and peace of mind throughout the renovation process.
What Kind/How Much Insurance?
Taking steps to make sure your contractor is insured in COLUMBIA is just the beginning. You also need to make sure the contractor has adequate coverage and the right types of insurance.
First, would the contractor’s insurance cover major damage to your home? If, say, you live in a $1.5 million home, and your contractor’s insurance would cover only $500,000 in damages, then you probably need to keep looking.
Your contractor should carry general contractor liability insurance comprising the following types/levels of coverage:
- Liability insurance – Covers injury to you or your family and protects you from lawsuits
- Workman’s Comp – Protection for the contractor’s employees in the event of injury (not required in all states for smaller contractors, so you’ll need to ask)
- Property damage – Covers damages to your home during the course of the project
Steps You Need to Take
But how, precisely, can you make sure your contractor is insured in COLUMBIA? There are several steps you can take mitigate your risk and make sure you’ve chosen a reputable, fully insured contractor.
- Check out the contractor with the Better Business Bureau
- Check references and talk to former customers
- Have a formal in-depth meeting with the contractor before signing any contract
- Ask to see insurance and bonding documents
- Get everything in writing – all aspects of work to be done, work milestones and payment schedule, completion date, contingency clauses, and so on
How Does Your Contractor Deal With Subcontractors?
Suppose, for example, your remodel project involves adding a room to your home. In that case, the general contractor will probably hire subcontractors to do the framing and brick laying. But are the subcontractors insured?
It sometimes happens that subcontractors are brought in on a cash basis. There’s no record of their employment by the general contractor, and, as a result, they aren’t covered by the contractor’s insurance (or bonding) should something go wrong. So, in addition to investigating your contractor’s insurance status, you also need to determine how they deal with subcontractors.
Knowing how to make sure your contractor is insured in COLUMBIA is crucial for any major work done in or on your home. Your local real estate professionals can also be a good resource when you’re checking out contractors.
For instance, if your remodel project involves adding a room to your home, the general contractor will likely hire subcontractors for specific tasks such as framing and bricklaying. However, it’s important to consider whether these subcontractors are insured. In some cases, subcontractors are hired on a cash basis without any formal employment records with the general contractor. This situation can result in subcontractors not being covered by the general contractor’s insurance or bonding in case something goes wrong.
Therefore, in addition to verifying your contractor’s insurance status, you should also investigate how they handle subcontractors. Ensure that subcontractors are appropriately insured and bonded to avoid potential liabilities.
Knowing how to confirm that your contractor is insured in COLUMBIA is essential for any significant home improvement project. Local real estate professionals can be a valuable resource when vetting contractors, offering insights and recommendations based on their experience in the area. This diligence helps protect you from unexpected costs and liabilities, ensuring a smoother renovation process.