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A word on contractor insurance – ASK FOR IT!

August 19th, 2010 No comments

In my world we run into a lot of unscrupulousness competitors.  One simple way to weed out those that should from those that should not is by checking up on their insurance coverage. For contractors that are properly insured the common practice when asked is to provide a CERTIFICATE OF INSURANCE.  Simply put, it is a quick glance document made out to you by the insurance company.  It wound be sent direct form the agent supplying the coverage to dismiss any chance of document tampering, and typically it shows the clients name on it to prove that coverage is in place for that specific project.

Here is a current example of our certificate of insurance:

Certificate of insurance for blog

So the key things to look for on these is that both General Liability and Workman Compensation insurance is in place.  The minimum standard for General Liability is 1 million combined (you will see on our certificate we carry 2 million as required by some of our commercial clients) and the minimum standard for workman compensation is 300,000 (again we are required to carry 500,000 for some of our large scale projects).

Second – make sure that vehicular coverage is in place. In the case of many “trunk slammers” they may not have coverage at all (may just have their standard minimum coverage insurance).  Once you start using a vehicle for business and service work there are very different coverages required – and standard insurance will not protect the contractor or the client in the event of an accident on site.  In fact – many carriers will cancel a policy and deny any claim on a vehicle involved in an accident that was not properly insured for business use.  In our case we carry that insurance with State Farm and a have a separate certificate for that.  That tends to be the case for most contractors.  It is a similar document and will read the same way.

Finally, double check that dates on all the certificates are current – make sure the coverage is in force for the period of time that your specific project will be taking place in.