Hiring a contractor: insurance basics

  
     
July 27, 2012

It’s important to make sure the contractor has workers’ compensation and third-party liability insurance for all the people on the job and damage they may cause. According to the Canadian Mortgage and Housing Corporation, $2 million is standard, this may not be the case in rural areas for liability insurance.

Don’t just take the contractor’s word — ask to see a certificate and check to make sure it’s current. Don’t accept or assume any liability for the contractor or trades people.

As for your liability, your homeowner’s insurance policy may cover you during a project done by a renovator but you should always advise your insurance provider of any renovation work ahead of time.

However, if you’re acting as your own general contractor and employing trades people, your policy won’t automatically cover you. You’ll have to ask your insurance company for temporary coverage, which will likely involve a small extra premium. Again, make sure any tradespeople you hire have their own insurance.

Before hiring a contractor make sure they:

  • Hold a valid BC Safety Authority Licence
  • Provide references
  • Have liability insurance
  • Are covered through WorkSafeBC
  • Provide warranties on all work and materials
  • Submit the written quote with:
  • Total cost of work
  • Timeline: start and end date of work
  • List of permits and the costs (i.e. electrical, gas, building)