You have found a contractor, handyman, painter, electrician, etc., that you want to hire to work on your home. You have asked a number of questions, confirmed he or she has insurance, and checked their references. The next big question is whether to pay a deposit upfront and how much, right? Well perhaps, but let’s go back to the insurance issue.

Did confirming that the service provider has insurance (general liability and worker’s compensation) consist of you asking if they are insured and them saying “yes”? That is only step one. The next question is, “Can you have your agent mail (or fax or email) me a certificate of insurance for general liability and worker’s compensation?” Unless the proof of coverage comes directly from a bona-fide agent, there may be no actual coverage, or it may not be current.

Sometimes the service provider will hand you a photocopy of the cover page of their policy. This is also not proof of coverage. The policy may have lapsed. Plus, unless you know a lot about policies, you may not really understand what the document they show you is for and what it covers.

It may seem like a bargain to hire a friend or neighbor to make repairs around the house, but if they are not insured and make a mistake causing damage, or get injured, the bargain can turn into big trouble. Many homeowners assume they have personal liability coverage under their homeowner’s policy if someone comes on their property and is injured. For guests at your home, yes you have liability coverage on your homeowner’s policy, for hired persons, no benefit! This includes your neighbor’s child who mows the lawn.

A handyman or sole proprietor may tell you he cannot purchase worker’s compensation coverage, or is not required to, because his company consists of only himself and perhaps a helper. That doesn’t change the fact that he has no coverage for injuries that may incur while in your employ, and neither do you!

 Last word–A company with proper insurance does have to charge more because they have legitimate higher costs of doing business. Assuming the risk yourself by hiring uninsured services is a scary bargain.