Do you look over contractor’s insurance policies before hiring the team? You should do!
Whether you’re a real estate owner or a condo board, you may be looking to hire a general contractor for a construction project or build-out. You may even be a general contractor looking to hire subs for your job. Regardless, it is you who is responsible for checking the contractor’s insurance. While you want to assume the best in people and that everyone who works for you has reliable coverage, this isn’t always the case. Checking that their Certificate of Insurance and the policies they represent are in force can save your business from serious financial impact should an incident or damage occur.
For businesses large and small, from construction companies to freelance entrepreneurs, hiring subcontractors could be ideal. This allows your business to bring in professionals with a particular expertise, expand in-house capabilities, and keep up with a heavy workload. Unfortunately, you need to do more than just seal the deal with a firm handshake. These days, you need to ensure the subcontractor you’re hiring is well protected.
Here are just a few things to consider when taking on contractors.
Who’s liable? Typically, if employees are injured on the job, Workers’ Compensation will step in. This coverage is a no-fault system that provides medical benefits as well as lost wages for injuries that occur on the job. While property owners can control this risk by ensuring a safe and healthy workplace, it is worth finding out if contractors and subcontractors are covered. This may be a case of contractually transferring risk to contractors and the contractor’s insurance policies must provide reliable coverage.
Reviewing the insurance policies. With costs rising in every aspect of the construction industry, constructors are finding new ways to cut their costs. Since insurance is one of their biggest expenditures, some contractors are adjusting their coverage in an effort to reduce premiums. It’s important to review the insurance policies as many exclusions won’t be listed on a Certificate of Insurance. Look for Contractual Liability Limitation, Independent Contractors Limitation, and ‘Injury to Employee’ exclusion.
Protect yourself. Along with a review of insurance policies, it’s wise to protect your property. If a contractor’s or subcontractor’s policies are not in compliance, the contractor and subcontractor should not be allowed on the site until they have the proper coverage. If you are a landlord, you should also request that all your tenants require proper insurance from all their contractors and vendors.
Do you need the right insurance for your property or construction project? To get started on your tailored policy, contact Nahai Insurance Services.