Let’s say you hired a construction contractor (specifically a handyman) to install a chandelier in your living room. Over the weekend, the wiring on the chandelier overheats and ultimately results in the entire home burning down. The big question is: does your homeowners’ insurance protect you?
Typically, yes. Your homeowners’ policy will probably pay for rebuilding the house and related expenses, and then sue the contracting company to try and make up for that loss. However, there may be some particular exclusions in your policy that you should be aware of. Listed below are a few things to keep in mind before hiring a contractor to do work around the house.
Physical damage or bodily injury
If the construction contractor’s work accidentally results in damage to your home or injury to someone in the home, your home insurance policy may cover your losses. Check with your insurance provider to clarify what exactly is covered by your policy.
To be extra safe, you should make sure that your contractor has insurance that covers his/her line of work. With that in place, you will have two lines of defence in case something happens: the contractor’s insurance and your home insurance policy.
Poor quality work
If the quality of the construction contractor’s work is not up to par, your policy likely won’t help. For example, if the construction contractor does a bad job of painting the house, it would be between you and the contractor to settle the problem.
Although your home insurance likely does not cover poor quality work, it may cover damage that is caused because of the work. This is caused “consequential damage”. So, if while painting the house, your construction contractor knocks over a lamp and starts a fire, the resulting damage may be covered.
Level of coverage
If you are doing any meaningful work around the house, contact your insurance provider and understand what is actually covered. Also, make note of the limits and validate that they are sufficient. For instance, if you are doing a massive renovation, you could consider increasing your limits just to be safe there is sufficient insurance to cover you in case something goes wrong.
- Read more: Why do I need contractors insurance?
- Read more: Risk management while working with subcontractors
- Read more: 5 risks that can hinder the progress of your construction business
- Read more: 5-point checklist to hiring a contractor
- Read more: Does my contractor’s insurance cover me in case his/her work is of poor quality?
Zensurance is Canada’s leading online commercial insurance broker. We offer a full range of insurance products to small businesses, with a particular focus on digitizing businesses and technology startups. We understand what it is to work with new technology, and know the most common risks of which you should be aware. Based on that (and a lot of analytics), we recommend the ideal insurance coverage for your business.