Tuesday, July 17, 2007

What Landlords Need to Know About Contractors' Insurance

By Scott Brueggeman, Fellow Landlord and Publisher of CompleteLandlord.com

It is time to remodel your property. You have hired a highly recommended contractor, discussed the work and agreed on a price. You have confidence in your contractor’s ability, but do you know whose insurance will kick in if someone is injured or property is damaged during the project?

  • To protect yourself, make sure any contract you sign includes the following:
    Verification the contractor has a valid commercial general liability insurance policy that will be in effect when the work begins
    Proof of insurance with sufficient coverage for the work to be done and the type of work required for your job
    Your name and property listed as a named or additional insured on the policy
    Confirmation the contractor’s insurance is the primary policy, not your own personal insurance

Request a copy of the contractor’s insurance policy and review it before work begins on your property. Check that the policy is in accordance with all the conditions in the contract you signed.

Additionally, be sure the policy is taken out under the same name as the contractor you hired. Contractors often use multiple names for business purposes, but if the name on the policy is different from the name on the contract, then you are not insured. Finally, make sure the policy provides adequate coverage.

Taking these precautions when hiring a contractor will help you rest easy while work is being done on your property.

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