Imagine you hired a contractor to redo the wiring in your living room to support your upgraded entertainment system. They didn’t turn off the right part of the circuit breaker, suffered a serious electric shock, and are now disabled for life. Are you financially responsible? Continue reading to find out.
Who Pays When a Contractor is Injured?
Usually, when someone you hire to work on your home is injured, they would be responsible for their medical costs. The main exception is when you did something negligent such as leaving your dog’s ball on the basement steps they needed to climb down.
Unfortunately, a contractor with no insurance and no money in the bank may try to find a way to get you to cover their medical bills. This might be by claiming they were an employee entitled to worker’s compensation or by finding a way to sue you for negligence.
Who Pays When a Contractor Hurts Someone Else?
If a contractor drops something off a roof and hurts your neighbor or damages a neighbor’s property as they carelessly move equipment, the contractor is responsible. However, as the person who brought the contractor there, you are also responsible to your neighbor.
If the contractor has insurance, their insurance will take care of things. If they don’t, you may need to pay your neighbor without having any way to get reimbursed by the contractor.
What Insurance Coverage Should a Contractor Have?
To avoid having to pay for your contractor’s injuries or negligence, you should make sure that they’re fully insured before you hire them. Ask about, and check the certificates for, the following coverages.
- Worker’s Compensation: Missouri requires businesses with five or more employees as well as construction businesses with at least one employee to carry worker’s compensation coverage. Smaller contractors may not fall under these requirements. However, you should still require that they have it on your own so that any workers injured on your property are covered.
- Commercial General Liability: Liability coverage is what pays for any harm a contractor does to others whether that’s personal injuries or property damage. Typical policy limits are at least $1 million.
- Commercial Auto: A commercial auto policy covers damage caused by a contractor’s vehicle such as if they back into a neighbor. Separate coverage is often needed because auto accidents are typically excluded from general liability policies.
- Builders Risk: Builders risk coverage covers the contractor’s materials and tools while the project is ongoing. If there’s a fire at night or a burglary, this coverage saves a dispute between the contractor and homeowner over who’s responsible for paying for replacement items.
Verifying Coverage
You should always ask to see a current certificate of insurance before making a final decision to hire the contractor. Your insurance agent can help you verify the coverage if you aren’t sure how or exactly what coverage to ask for. They can also review your own policy limits to see if you have any gaps in coverage.
Mid-Rivers Insurance can help make sure your home improvement project is fully insured. Give us a call today to learn more.
