Your contractor’s insurance plays a huge role in making sure any damages or issues are covered for costs. Each state has a different law on whether or not you need it, so it’s best to look up what your state has predetermined for yours. The penalties for not having the contractor liability insurance also vary for each state, so it’s important to keep that in mind as well. This type of insurance also comes in handy when it comes to customer-related disputes. If anything goes wrong project or customer-wise, you can be sure that a majority of the costs can be covered and resolved by the contractor insurance as long as it stands and is legitimate and active.
Now that you’ve realized its importance, here’s how you can check if your contractor is being honest about having legitimate insurance…
Contact the contractor’s insurance provider
Pick up the phone and confirm their legitimacy as well as your contractor’s membership. Fraudulent insurance coverages, documents, agents, and even companies exist, making verification imperative for any company that requires insurance. To verify this, request for the name and contact number of your contractor’s chosen insurance provider. If possible, ask for their business card instead of writing their contact details down. Then, do your own research by looking up the said agent online and confirming their identity over a phone call. Through this conversation, you can easily work out the legitimacy of the contract as well as the insurance provider themselves.
Don’t make assumptions when it comes to liabilities
For good measure, never assume that just because an agent handed over a certificate of insurance, everything is covered by the said insurance. Although insurance policies may cover a major part of what needs to be insured, they vary in liabilities as well. Among these insurances are the General Liability Insurance (GLI) which mostly covers property damages and bodily injuries. Another common type of insurance is the Inland Marine Insurance which covers business assets that don’t stay in one location such as special work tools and equipment. With this knowledge, always be wary of the liabilities that your COIs cover as they may include some and exclude many if not discussed in full detail.
Be aware of limits in your contractor’s insurance
Like any insurance, your contractor’s COI also has its own limits for liabilities. Knowing these limitations will help you or your assets receive aid for anything that may need insurance such as injuries, natural and manmade catastrophes, and other types of damages. Having an extensive foresight on things that may go wrong along the way can benefit any project as this gives enough time to question whether or not specific damage or loss is covered by the insurance. This habit then saves everyone involved in the project their time, effort, and money just to resolve issues that could’ve been foreseen with proper risk management.
Become listed as an “additional insured”
Your contractor may be able to add you as an additional insured on every COI they provide. Being added as such will allow your company to receive the benefits you require from healthcare insurance to damage insurance. The addition lets you plan ahead for any risks and challenges that the project might encounter, minimizing the costs and effort you’ll be providing in case crises arise.
Having a state-of-the-art COI tracker allows projects to sail smoothly as each milestone is achieved. Not only will you avoid the hassles of straightening out the part of the project that has gone uninsured, but you can also plan better, knowing that you have insurance on your back. Schedule a demo with COI Tracker today!