May 1, 2014 2:36 pm
For many people, your home will be the most valuable asset you ever own. And, you want to do your best to improve and preserve your property whenever possible. Before starting any renovation work, you will want to make sure you are protected against financial loss should an accident or an injury take place during the project.
Even though your house might be adequately insured, your risks change once your home becomes a construction site, which is why it is important to take the necessary precautions.
When a contractor works on your home, you need to be protected from a number of risks. Insist that the contractor provides you with proof of Business Liability Insurance also known as general commercial liability insurance. $2 million is the minimum that should be requested. This protects you if your home is damaged through the contractor’s fault, or if the contractor causes damage or injury to a third party, like your neighbour. Your best options is to have your insurance broker review the contractor’s policy to make certain there are no gaps between it and your own policy that leave you financially vulnerable.
If your contractor needs to hire in additional trades, such as an electrician or plumber, make sure they are insured for the work they perform. For example, your contractor should have Workers Compensation coverage for all the people on the job. If they don’t, you could be at risk if a worker is injured while working on your home renovation.
If you do the work yourself or plan on acting as your own general contractor and hire others to do the work, make sure you properly protected against damage or injuries suffered as a result of your project.
While most repair or renovation work will not require changes to your homeowners policy, there are some coverage restrictions you should be aware of. If building materials stored on your property are stolen, they are not usually covered. In addition, if the building is under construction, there may be no coverage for vandalism or malicious acts. Water damage is also restricted, especially if it is during the usual heating season. If your property is going to be vacant during the renovation, you will want to make sure your coverage does not lapse.
Remember, do your research before the renovation work starts – protect your most valuable asset.