When it comes to having a company or person provide a home service for you due diligence is key to protecting your biggest asset, your home. When hiring a contractor asking for their Liability Insurance is a must. If the company turns out to not have insurance, or are under insured, the homeowner can be held liable for the contractors actions.
Lets look at a common hypothetical situation:
Jane and John Doe hire ABC Contracting to paint the outside of their family home. Jane forgets to check the insurance of ABC Contacting, or chooses to ignore the need for insurance altogether. Jane and John may simply have chosen ABC Contracting because they provided the lowest bid. In reality John and Jane are willing to “roll the dice” to save a bit of money.
An Accident occurs. One of ABC Contracting’s employees falls from a ladder and a serious injury or death happens. As the homeowners, John and Jane naturally expect the Contractor to be liable for his own actions. In this situation, ABC has no insurance so the injured individual or the deceased’s family sue John and Jane’s Home Owner Insurance Policy for their loss.
This is the point where John and Jane could have the shock of their lives.
Unless John and Jane have a “separate contracting insurance rider policy” added onto their basic Home Owner Insurance policy they will have no recourse and have to pay out of pocket for the claim.
Beware, this happens albeit rarely. Due Diligence is a must!