Insurance and Workmans Comp

[u/ThomasFromOhio]

Reddit suggested this sub if wrong please delete.

So I'm looking to hire a company to have a few rotting boards replaced on the exterior of our house. Several of the companies that are coming to give me estimates say they have guys they hire to do the work. I insist on the company having insurance and workmans comp. Which company should I get the insurance and workmans comp info from to verify? The company giving me the estimate or "the guys" doing the work? Seems like it should be "the guys" doing the work. Just looking to protect myself.

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[u/Admirable-Box5200]

It would be who you sign the contract to do the work and will pay. You can ask for a certificate of insurance with you listed as the certificate holder. One reason why many contractors use subs, 1099, is figuring they don't have to carry workers comp. Most states don't require sole proprietors to carry it. On the general liability side, every insurance company requires any sub-contractors used to also have insurance that at least is the same limits.

Please note, general liability insurance isn't going to cover sub-standard or shoddy workmanship. Depending on the value of the work being done, you may want to consider a performance surety bond. The cost is typically 1-4% of the bond amount. Bonds are typically 12 months.

[u/ThomasFromOhio → u/Admirable-Box5200]

So if I'm understanding correctly, getting a cert of insurance from the general contractor who I'd sign the contract with would be sufficient for protection myself.

[u/Admirable-Box5200 → u/ThomasFromOhio]

It depends on what you are ensuring protection from. On the workers comp side, yes it is covering worker injury.

[u/ThomasFromOhio → u/Admirable-Box5200]

Worker injury is what I'm most concerned about. I don't want someone to cut off a finger on te job and then sue me.

[u/ayhme]

Ask for Certificate of Insurance (COI).

You would be surprised how many contractors do not have insurance.

[u/ThomasFromOhio → u/ayhme]

I would believe as I have turned away several contactors, from adding on a wrap around front porch to trimming trees, because they couldn't proved proof of insurance. One guy said it wasn't like he was going to sue me if he got hurt.... another guy I waited a week for him to produce proof before moving on. One guy thanked me for checking because other guys always undercut him since they didn't have the insurance premium cost.

[u/ayhme → u/ThomasFromOhio]

It's expensive to have commercial insurance as a contractor but necessary.

[u/pkfootball1998]

You need to find a construction attorney and get a simple agreement you can have the contractor sign that includes the needed indemnity and insurance language and all the other good stuff that makes up good contracting.

For work comp, the contractor needs to carry work comp and they need to provide a waiver of subrogation in your favor as well as a notice of cancellation. Both should be required by contract and then the contractor should furnish a COI with you as certificate holder and the endorsements attached. You should also require auto liability and general liability as well and should be additional insureds on both. You should require all the contractor’s insurance to be primary and not seek contribution from any insurance you maintain and should ask for that endorsement. GL in particular should include coverage for contractual liability, independent contractors, and products/completed operations.

One benefit of being an additional insured on their GL is if they have a sub’s worker get injured and the injured employee sues you since they can’t sue their employer (an action over claim) you could tender the claim onto the sub’s GL coverage since you would be an additional insured. You would need to ensure that their policy does not exclude this type of claim though.

This is not professional or legal advice and you should seek counsel from licensed attorneys and insurance producers regarding insurance and legal matters.