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For small business owners and homeowners alike, budgetary constraints often force us to make some difficult decisions when it comes to when or how to have work performed, and what contractor to hire. 

One matter that should not be a difficult decision is to only deal with contractors who carry Commercial General Liability (CGL) Insurance, and to ask them for a Certificate of Insurance confirming this. All reputable contractors will have no difficulty asking their own Broker for a Certificate of Insurance, it doesn’t cost them anything and is likely something they do on a regular basis. 

As a homeowner, or business owner doing business with a contractor who is adequately insured could mean that if a loss occurs while they are on the job, his or her liability insurance responds. If they do not carry insurance, and do not have the financial ability to pay a claim, you will likely be solely responsible. In all likelihood your own property insurance will respond, but any deductibles and future premium increases as a result of this claim would be your responsibility. 

In summary, what should you be looking for in a contractor when it comes to their Insurance coverage? 

• Only hire contractors who carry Commercial General Liability Insurance.
• Ask your contractor for a Certificate of Insurance, any reputable contractor will know what this is and have no difficulty getting you one promptly.
• If subcontractors are hired, ensure that they are also insured.
• Ask for a new Certificate each year for contractors used regularly.
• Ensure the limit on the certificate is adequate, it would be unusual to see limits less than $1,000,000, and most contractors would have limits of $2,000,000 if not higher.

If your contractor does not, or cannot, furnish you with a Certificate of Insurance, this could be a signal that there may be other areas of their business they are not paying attention to, and a good reason to look for another supplier.