What Policy Does My Contractor Need?

Did you know that before you hire a contractor or home improvement company that you should research if they have the proper insurances and policies that help protect them and you? However, we know that there are so many different policies on the market that it may be hard to find the right person with the right insurance. That is why we wanted to explain the type of policies your contractor should have. 

Why should my contractor need to be licensed, bonded and insured?

In life, especially when it comes to manual labor, anything can happen. People can get injured. Equipment can be stolen. Contractors can provide low-quality work and so much more. The best way to protect not only the company and the employees but the homeowner as well as for the contractor or company to be licensed, bonded and insured

What insurances should they have?

There are a variety of insurances a home improvement company can have. Here is a condensed list:

  • Contractors General Liability – covers claims due to damages a contractor causes for a third party
  • Products & Completed Operations Insurance – covers claims for completed projects
  • Workers Compensation – covers employees for on-the-job accidents
  • Equipment Coverage – protects tools if they are stolen or lost through natural events
  • Property Insurance – covers the space where the contractor’s office is located
  • Builders Risk Insurance – protects builders and contractors from tools and equipment that may get stolen, lost or damaged

Should they have additional coverages?

Having additional coverage is 100% optional; however, it is highly encouraged. Here are a few extra coverages a contactor can purchase:

  • $2-5 Million Liability Insurance – increases general liability for larger companies
  • Hired & Non-Owned Insurance – covers auto liability to vehicles the company uses that are not owned or are rented by them
  • Leased Equipment Coverage – covers leased equipment that is lost, stolen or damaged in large companies
  • Contactors E&O Insurance – covers errors or omissions from hired subcontractors 
  • Employment Practices Insurance – covers employee misconduct (sexual harassment, discrimination, wrongful termination, etc.)

Depending on the size of the company and the services they offer, there are even more insurances the contractor can add on to protect themselves, their employees and their clients.

How do I know if they have insurance?

The easiest way to know if the contractor has insurance is to ask them up-front. Many contractors and companies will also state it online. If they refuse to tell your or their documents are false or expired, then find a new contractor immediately. You never want to get stuck with a contractor that does not have insurance, or you may be reaping the damages or issues that may occur. 

If you are looking for a contractor in St. Louis, O’Fallon, Belleville, Edwardsville or the surrounding areas that are licensed, bonded and insured, then you don’t have to look far because Valor Home Services has all three! We can happily show you all our insurances and explain them to you. Our entire goal is to provide you with a stress-free experience; therefore, we make sure we have all the policies to do so. For more information or to book an appointment, give us a call today.