Contractors, Bonding and Insurance

by Steve Bennett on FlickrIf you look at most of the advertisements for contracting services, the words “Licensed and Bonded” are frequently used. The intent is to give you, the consumer, a feeling of comfort. After all, if something does go wrong they are bonded, right? Not so! The bond that contractors have is called a Contractors License Bond. It allows the license board to more easily collect any fine they might issue to a contractor. It does absolutely nothing for the consumer who hired him.

So if the contractor you hire leaves debris around and someone trips and falls, who is liable? If that contractor has employees and one gets injured, who is liable? I’m not an attorney but I do know that property owners are typically responsible for what happens on their property.

So, what should you do? Use only contractors that are insured.

You should insist on getting a certificate of insurance from that contractor’s agent or broker. Have the certificate sent to you directly by that agent or broker. We’ve seen some contractors actually alter an old copy of their certificate to look like their insurance was still in force.

Look for General Liability coverage and, if the contractor has other workers, Workers Compensation coverage. Both should have limits of $1,000,000 or more.

If the project is going to take a while, consider requesting a new certificate from the agent or broker to make sure the coverage is active.