What Can Happen if You Hire an Uninsured Contractor

What Can Happen if You Hire an Uninsured Contractor

Contractor insurance holds great importance for both the client and the service provider. When working on a job site, contractors should obtain workers’ compensation insurance and at least one type of liability coverage. A contractor with insurance is also more likely to obtain the necessary permits and do professional work. To avoid the financial risks of hiring uninsured contractors, individuals and businesses can use contractor screening services such as Insure GUARD. We understand the importance of certificate of contractor insurance when you need it to submit a bid or receive payment on a project.

Damage to Property

It’s not common for contractors to accidentally damage buildings or other property. A hammer might fall and break a large window. An electrician could start a fire. A contractor’s mistake could even injure bystanders or one of the building’s residents. It usually proves more difficult to gain compensation from an uninsured contractor. When it comes to the construction industry, general liability coverage compensates for job site injuries and damages in most U.S. states however, it does not refund the cost of shoddy work and the exact level of coverage varies.

Injuries on the Site

In addition to needing insurance, the client must have assurance that the job will be done safely. Contractor screening and prequalification services can qualify contractors and ensure that they are compliant with project-specific requirements, guidelines and standards. By following certain procedures, worker injuries are less likely to take place. When job site injuries occur, it may yield in thousands to millions of dollars in hospital bills. Many contractors from various industries work in high-risk fields. For example, more fatal injuries take place in the construction industry than in any other American industry, according to the Centers for Disease Control (CDC). If they lack insurance, injured contractors sometimes bring lawsuits against their clients. Contractors should obtain workers’ compensation insurance to ensure that they do not burden themselves or their clients with the financial cost of worker injuries. Contractor prequalification services can verify that a firm maintains proper workers’ compensation coverage.

Always Verify Insurance

It isn’t enough to merely ask contractors if they have insurance. It’s important to use a prequalification service that verifies that a contractor’s coverage is genuine, provides adequate benefits and remains in effect. Contractor screening services can determine if firms carry sufficient insurance to satisfy project requirements. They can also verify that the coverage remains in effect throughout the work period. A contractor prequalification service gives both the operator and contractor peace of mind and prevents unexpected costs from injuries or accidents.

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