MISTAKE #7: Choosing A Roofer Who Is Not Fully Insured
There are two basic types of insurance coverage that a contractor can have and both of them are designed to protect you, the homeowner. General liability insurance is required by El Paso County and Teller County building departments in order for a contractor to obtain a license, and this insurance coverage protects you if anything on your property is damaged. For example, if a workmanship defect results in exterior or interior damage to your home, GL insurance should cover the costs of repair if the contractor chooses to file a claim.
Workmen’s compensation insurance, on the other hand, is not required by our local counties in order to obtain a contractor’s license, IF the contractor has no employees. Workmen’s comp insurance will protect you against liability if someone is injured on your property through no fault of your own.
Here’s why this can be such a danger for a homeowner.
A contractor who has no employees can claim to be “fully insured” in El Paso and Teller counties, as long as he only has General Liability insurance but no Workmen’s Comp insurance, because that’s all he’s required to have. However, if someone gets injured on your property and he doesn’t have Workmen’s Comp insurance, you could get sued by the personal injury lawyers. This actually happened here in 2012 and the homeowner was on the hook for up to $500,000 of medical costs for an injured worker.
The way that many contractors get around the requirement to have WC insurance is by making their estimators and salesmen sub-contractors instead of employees. The problem is that this is a “loop-hole” that they’re trying to work to their temporary advantage. The reality is that, in most cases, the estimators and salesmen are not sub-contractors by the legal definition of the term, but are actually employees. In order to work the system to avoid the cost of having to buy Workmen’s comp insurance, these contractors are really putting you, the homeowner, at great risk of liability in the event of an injured worker.
What Should You Do?
Only hire contractors who have both General Liability and Workmen’s Comp insurance. It is only these contractors who are truly “fully insured” and provide their employees and their clients with the protection necessary. If you’re interested in hiring a contractor, ask him to have his insurance agent mail or email you a copy of his insurance coverage certificate. This document will show you what coverage he has, but don’t accept a printed copy he hands you; these are way too easy to falsify. Receiving one directly from his agent will help assure you that he actually has the coverage he claims to have. If he balks at your request for this, find a different contractor.