Making Sure Your Contractors are Insured – Part 1

By Ben Simmons, Associate

Georgetown Insurance Service, Inc.

Silver Spring, MD

Part of responsible homeownership is keeping your house maintained and updated. This often requires outside help and expertise. While we always encourage shopping and supporting local businesses, we do recommend that you take the time to carefully consider and vet any and all contractors who work on your home. While your neighbor’s recommendation might be spot on, you should still take the proper steps to protect yourself and your home.

Once you have a contractor in mind, there are four easy steps you can take to ensure they are licensed, insured, and reputable.

Step One: Google them

Say you’ve received a recommendation from your neighbor on the best handyman in town. The next logical step to take is to conduct some quick online research. A simple Google search could provide you with some additional insight into their past work and reputation. Remember, today the first place customers go with a complaint is online. While a negative review is not always means for disqualification, it can raise some red flags or questions that you will want clarified.

Step Two: Request a current certificate of insurance (COI)

Once you’ve selected a contractor, obtain a copy of their current certificate of insurance. This is a critical step to take because not all contractors have the proper insurance in place and sometimes they don’t have insurance at all. You certainly don’t want to end up in a worst-case scenario, such as a worker getting hurt on your property and the contractor not having Workers’ Compensation insurance or the contractor breaks or damages your property then leaves. You could be left to foot the bill in both situations.

Step Three: Verify the authenticity of the COI

Technological advances have made it easier than ever for people to obtain fake COIs. It is important that you take your research one step further, and make a quick call to verify the types of insurance with their insurance company and review their limits. Every contractor should be licensed in their specific trade or specialty and should have workers’ compensation and general liability coverage in place.

Step Four: Verify the existence of a home improvement license

In addition to having insurance, contractors should also be licensed to provide home improvement services. Many states, including Maryland, Virginia, and D.C., have online directories that allow you to do a license lookup by name, license number, and license type. For some states, including Maryland, in order to obtain or renew your license, contractors pay a guaranty fund assessment. This assessment contributes to a guaranty fund that reimburses homeowners if a licensed contractor performed a job in unworkmanlike, incomplete, or incorrect manner. If the contractor was not licensed, a homeowner cannot make a claim to the fund.

While these steps may require some additional effort, they will provide you with some much needed peace of mind. Contact any of our agents today with any questions or concerns.


Disclaimer: All data, information, and opinions provided on this article, newsletter, or blog is for informational and educational purposes only. While every caution has been taken to provide readers with the most accurate information and honest analysis, please use individual discretion before making any decisions based on the information in this article, newsletter, or blog. Georgetown Insurance Service, Inc. is not responsible if its readers happen to experience loss, injury, or damage resulting from its display or use. All information is provided on an as-is basis. This article, newsletter, or blog does not represent the thoughts, intentions, plans, or strategies of any specific Insurance Carrier, Georgetown Insurance Service, Inc. partner or affiliate.
Have questions? Contact Us to speak with a licensed insurance professional.

Leave a Reply

Your email address will not be published. Required fields are marked *