Verifying Contractor Insurance

• Contractors and Subcontractors
• Architects

It's important for your team to have appropriate insurance coverage to protect themselves, their clients, and their employees. It's incredibly important for you to make sure these are in place to protect yourself as the homeowner from potential liability as well. Make sure you reach out to an insurance agent or broker to determine the appropriate types and amounts of coverage you might need for your project, but we'll outline a summary of the key insurance types for residential general contractors and architects below:

Contractors and Subcontractors¶

General Liability Insurance: Protects against claims of bodily injury, property damage, and personal injury resulting from the contractor's work.

Workers' Compensation Insurance: Provides coverage for employees who are injured on the job, including medical expenses, lost wages, and rehabilitation costs.

Professional Liability Insurance (Errors & Omissions): Protects against claims of negligence, errors, or omissions in the services provided by the contractor.

Builder's Risk Insurance: Covers property damage to a building project while it is under construction, protecting the contractor against losses due to theft, vandalism, fire, and other risks.

Umbrella Insurance: Provides additional liability coverage beyond the limits of the contractor's other policies.

Surety Bonds: Offer financial assurance to the project owner that the contractor will fulfill their contractual obligations (often required for public projects).

Residential general contractors should consult with an insurance agent or broker to determine the appropriate types and amounts of coverage for their specific business needs. Requirements may vary depending on the contractor's location, size, and scope of their projects. Additionally, general contractors should require their subcontractors to provide proof of insurance before they can work on a project.

Architects¶

For a residential home project, homeowners should require architects and designers to have the following types of insurance coverage:

Professional Liability Insurance (Errors & Omissions Insurance): This type of insurance covers architects and designers for any claims arising from alleged negligence, errors, or omissions in the design and planning services they provide. It can help protect the homeowner from financial losses due to design flaws, missed deadlines, or other professional mistakes.

General Liability Insurance: General liability insurance protects architects and designers against claims for third-party bodily injury, property damage, and personal injury that may occur during the course of their work on a project. It can also cover legal defense costs if a claim is brought against the architect or designer.

Workers' Compensation Insurance: If the architect or designer employs a team, workers' compensation insurance is essential. This coverage provides benefits to employees who are injured or become ill while performing work-related duties. It covers medical expenses, lost wages, and rehabilitation costs, protecting both the architect or designer and the homeowner from potential financial liabilities.

When hiring an architect or designer for a residential home project, homeowners should ask for proof of these insurance coverages and verify that the policy limits are sufficient to cover potential risks associated with the project. Additionally, it is advisable for homeowners to consult with their own insurance provider to ensure they have adequate coverage for the construction project.