Building Contractor Insurance

By Laura Evans

Are you planning on remodeling your house? There are many factors you should consider when hiring a contractor; these considerations include having the proper insurance.

Hiring a Contractor

When looking for a contractor, it is very important to understand the requirements in your state. In California, for example, a contractor must be licensed and bonded. Laws may differ in your state. Regardless, you will want to make sure you hire a legal contractor to renovate your home.

Ask for references from potential contractors and check them carefully. If the contractor tries to ignore your request, it is time to look for someone else. It is also a good idea to check with your local Better Business Bureau to see if there have been any complaints lodged against any of the contractors whom you are considering.

Make sure you see copies of the licenses that any potential contractor possesses and double-check that his or her license is still valid.

Building Contactor Insurance

Building contractor insurance is very important. If your building contractor does not have insurance, your homeowner’s policy will not cover all the problems that may occur. This could be very costly to you. Make sure you are aware of the requirements that your state has for contractor’s insurance before hiring your contractor.

There are several types of contractor’s insurance for which to look. Your contractor should have, at a minimum, general liability and workers compensation insurance; some states also require additional property damage insurance. Your contractor’s general liability insurance will cover accidents that cause damage to your property while the contractor and his or her workers are on site at your home. Workers compensation insurance will cover any injuries that workers sustain while they are working on your home. You might consider asking your contractor to have his or her insurance company send proof of insurance directly to you.


For your protection, if your contractor uses subcontractors, ask to see their licenses and insurance certificates as required by your state; your general contractor’s insurance does not cover any subcontractors that are hired. Again, ask any subcontractors to have their insurance companies send proof of insurance directly to you.

Remember that if your contractor does not pay the subcontractors, they may be able to place a lien against your home. Ask you contractor, subcontractors, and suppliers to sign a lien release or waver to protect yourself from this.

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