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Thinking of Remodeling? Check Out YourContractor |
This millennium, I have big plans. Not life changing plans or a slew of soon forgotten new years
resolutions, like exercising more, eating healthier, or working less. I have big house changing plans B
remodeling plans. That old patio has to go. A new deck will take its place. The storage room would make
a nice bedroom if only it were a litter bigger. The dark paneling in the den, well its time has come and
gone. The paneling is definitely not something I want to take into the next millennium. If you, like me, are
planning a major overhaul on your home next year or something not quite so big but big enough to hire a
contractor, go into the next millennium armed with the knowledge that not only is it unwise to use an
unlicensed contractor, but it is equally, if not more, foolish to hire an uninsured contractor. Making a big
priority of the type, duration and amount of insurance the contractor you select carries, may save you a lot
of headaches and perhaps heartaches down the road if things don't turn out exactly the way you planned.
And let's face it, if things didn't go awry people wouldn't wind up in court as much as they do. By now
many of us are wise to the fact that we should steer clear of unlicensed contractors. These are the stories
that make their way to the trouble shooters on the networks. To find out if a contractor is licensed is easy
enough. First, ask for a copy of the license. But don't stop there. When putting your home in someone
else's hands, don't rely on face value. Do your homework. Your second task is to call the Contractor's State
License Board to inquire about the contractor you're considering. Ask about the term of the license,
complaints and suspensions. Before you hang up the phone, however, make sure that the license number
you were given matches the business name of the contractor, and check to see if the address the
Contractor's State License Board has matches the address the contractor is using. You wouldn't want to
find out a little too late that the contractor you selected either used someone else's license number or
pulled the number out of thin air. Unlike following up on a contractor's license, doing your homework,
when it comes to insurance, is a bit more cumbersome. Most people just don't know what to look for and
are content when they are handed a current insurance certificate. The problem is that a certificate of
insurance tells you absolutely nothing of value, other than lending the appearance that the contractor is
currently insured. Don't rely on an insurance certificate as evidence of insurance unless you follow up to
verify that the insurance is actually in place. Although you'll be far from an expert, here are some things to
look for in your contractor's insurance, and to insist on, before that first nail is hammered.
- Don't settle for a certificate of insurance, request a copy of the policy. If you wind up in court with your
contractor down the road, at that stage a copy of the actual policy of insurance may be difficult to get your
hands on; - Make sure the policy you are given is a comprehensive or commercial general liability policy,
typically referred to as a CGL policy; - Check the declarations page of the policy for the effective dates and
types of coverage. It is usually the first page of the policy. The coverages are typically checked off on the
right had side. Your contractor should carry at least $1,000,000.00 (one million dollars) of general liability
with completed operations; -If you are using a general contractor, and the general contractor is going to
subcontract out a portion or all of the work, ask if the contractor carriers Broad Form Property Damage
(BFPD). This coverage is important because, believe it or not, most CGL polices contain what is referred to
as the "works product exclusion." This is an all time favorite exclusion of insurance companies, and one
you will become intimately familiar with if you have to sue your contractor for negligent work and the
policy does not contain BFPD. Under the works product exclusion, if your contractor or one of the
subcontractors messes up, and for example your new $ 20,000.00 (twenty-thousand dollar) roof leaks like
a sieve, your contractor's insurance company does not have to pay because negligent work of its insured is
excluded. If the policy contains BFPD, to the extent the negligent work was completed by one of your
contractor's subcontractors, there is a better chance that the negligent work is covered (subject of course
to a myriad of other possible exclusions); - Find out how long the contractor has been insured. Go with a
reputable company that has been around a while, and, more importantly, one you think may be around for
at least another few yearsBanother ten would be optimum. It may be surprising to learn that the insurance
your contractor maintains year after year, after the work on your home is completed, is as important, if not
more, than the insurance your contractor maintains during construction, particularly if some form of new
construction is involved. The reason is that legal battles are often fought over the question of when the
negligent work first started to cause damage, or first occurred, and over what period of time damage
progressed For example if your new roof starts to leak three years after it was completed and the |
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