Why is it so important to hire a contractor who carries insurance?

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When it comes to hiring a pro, whether to paint a room or put on a new roof or do a floor-to-ceiling remodel, insurance is as important as training, experience and professional credentials. Think of it as a case of "hoping for the best, but planning for the worst"—you hope the job will do well, but if there's a disaster and your home suffers damage or, worse, a family member or the contractor is hurt, you're the one who'll be liable if you made the mistake of hiring someone uninsured.

We asked Charles Rio, president of Charles Rio Insurance and Financial Services, Inc. in Ridgefield, CT about the right questions to ask. "When considering a contractor to do work on your home or property, you should ask them if they are adequately and properly insured to operate as an independent contractor in the state in which they are expected to perform the job. Each state has varying insurance requirements, but as a general rule of thumb, a true independent contractor will carry their own General Liability Insurance and Workers Compensation Insurance. If they have commercial trucks, vans or pickup trucks delivering products for the project, they should carry Commercial Auto Insurance," said Charles.

"As the homeowner, you will want to ask to see an original 'Certificate of Insurance' listing the types of policies, coverage levels, policy dates and policy numbers," Charles added. "The Certificate should list you as the 'Certificate Holder.' In this way, you are sure that the policy is current, active and in force. If the policy should cancel during the project, you will be notified as the Certificate Holder. These policies can help protect you and your property in the event the contractor damages your property, causes an injury to someone else or sustains an injury on the job. Without these policies, the homeowner can become liable for some or all of these liability exposures. It can end up costing you hundreds of thousands of dollars in defense costs, fines and actual settlements. For this reason, it is best to ask for the Certificate of Insurance of any and all contractors expected to work on your property or in your home."