What insurance should I ask about before hiring someone to work on my house?

General liability: damage to your property

General liability insurance covers damage the tradesperson causes to your property or to a third party. A ladder through a window, a trench through an irrigation main, a falling beam onto a neighbor's fence. Without it, you are negotiating repair money with the person who caused the damage, and if they cannot pay, the claim lands on your own homeowner's policy or on you.

Ask for the coverage limit and whether the policy is current. Limits vary, and the right number depends on the size of the job. The important thing is that the policy exists, is in force for the dates of your project and is in the name of the business you are actually hiring.

Workers' compensation: injuries on your property

Workers' compensation covers people who are hurt while working. California requires it for anyone with employees. A sole owner who works alone can file an exemption with the CSLB, and the license lookup shows that status. The trouble starts when someone who is exempt shows up with two helpers. If one of those helpers is injured in your backyard and there is no coverage, the injured worker's lawyer will look at the homeowner.

So the question is not just whether the person you hire carries workers' comp. It is whether everyone who steps onto your property is covered, either by that policy or by a subcontractor's own policy. Ask who will be on site and how each of them is covered.

A bond is not insurance

Licensed contractors in California must post a contractor's bond with the CSLB. Homeowners sometimes hear bonded and insured as one phrase and assume the bond protects them from everything. It does not. The bond is a limited fund available to consumers and others harmed by a licensee's violation of the license law. It is useful, it is small relative to most projects, and it does not replace liability or workers' comp coverage.

The CSLB's license lookup shows bond status and workers' comp status for any licensed contractor. For anyone else, you are relying on the certificate they hand you.

How to read a certificate of insurance

A certificate of insurance is a one-page summary issued by the insurer or broker. Check four things: the named insured matches the business you are hiring, the policy periods cover your project dates, the types of coverage listed include general liability and (where there are employees) workers' compensation, and you are named as certificate holder. Being certificate holder means the insurer will notify you if the policy is cancelled.

If a certificate is more than a year old or is a photocopy with a different homeowner's name on it, ask for a fresh one. Brokers issue them routinely and it costs the tradesperson nothing.

Your own policy matters too

Call your homeowner's insurance agent before a project of any size. Ask what your policy covers if a worker is injured on your property, whether materials stored in your yard are covered before they are installed, and whether a new deck or structure changes your coverage once it is finished. Some policies want to know about new structures; some do not care. The call is free and the answers are specific to you.

Ask us the same questions you would ask anyone. A craftsman who takes the work seriously will answer plainly and in writing, and will not be offended that you asked.

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