If you are considering having a company (or individual) provide home service for your due, diligence is key to protecting your biggest asset, your home!
If you are considering hiring a contractor quality and comprehensive Liability Insurance is a must. If the company turns out to not have insurance, or are underinsured, the homeowner can be held liable for the contractor’s actions and or damage.
Here is a potential hypothetical situation:
Jane and John 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 but beware it’s not always the cheapest company that is delinquent with insurance coverage. In reality, John and Jane are willing to “roll the dice” to save a bit of money.
Let’s assume 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 Homeowner 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 Homeowner 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!
The long and short of this story is that you could be in a major financial crisis if you don’t deal with a professional contractor who has the proper insurance and workers compensation coverage that is required by law. Finding out ahead of the project start is a must!