Workers' Comp for Rehab Project? - Posted by Suzanne

Posted by jen-LA on May 21, 2000 at 15:34:04:

I’m pretty sure we’ve never had insurance on any of the workers working on our rehabs- not saying this is necessarily a good idea, but if you are really worried about it, you can find workers who are insured for themselves. Alot of professionals are- painters, etc. Others on this site may have more experience with this type of thing though- just my opinion!

Workers’ Comp for Rehab Project? - Posted by Suzanne

Posted by Suzanne on May 20, 2000 at 18:33:14:

I will be starting to rehab a fixer single family house in a couple of weeks. The insurance agent stated that my insurance policy does not cover an injury to anyone working on the property (i.e. - handiman, gardener, etc.)

Do I need to find another insurance agent?

Re: Workers’ Comp for Rehab Project? - Posted by Stephanie

Posted by Stephanie on May 21, 2000 at 20:12:59:

No, you don’t necessarily need to find another agent. My husband and I are both in the insurance business, and we dabble in real estate in our spare time.

This is what you will need to do to make certain that every aspect of your loss potential is protected. First, make certain that you have an insurance contract in place to protect you. You will need property coverage to protect your investment from at least the basic perils. Most, if not all, insurance policies will exclude flood coverage. In addition to the property policy, you will need general liability coverage to protect you in the event that a visitor may slip and fall (etc.) and injure themselves.

As for your contractors, you will need to require a “Certificate of Insurance” from each one before they begin work. The contractor will know exactly what you are asking for because this is a very very common request in the business. This is a one page document which will outline the coverages that you contractor carries. You should look to see that they carry workers’ compensation as well as general liability.

This is why…Say your roofer falls off the roof and is completely disabled for the rest of his life. He has three kids at home and no way to earn a living. His best source of money would be to sue you for hazardous conditions or something similar. By your contractor having workers’ compensation coverage, he will have a way to pay for medical bills and lost wages.

Second, say that you hire an arborist to remove trees in the front yard. While cutting down the tree, their equipment malfunctions, and they drop the tree directly on your rental property. If they do not have general liability insurance, it is doubtful that they will have the money to reimburse you for your expenses. Even if you did get a court award for their negligence, you can’t get blood from a turnip.

On that note, whether or not to require proof of insurance is entirely up to you. My husband and I will not let ANYONE work on our houses until we have had our contractor supply us with a “Certificate of Insurance naming us as an additional Insured” on their policy.

I would especially watch out for more hazardous types of work (roofing, concrete work, paving, etc.) Because this is a dangerous type of work, the cost of coverage to your contractor is very expensive. We have had numerous contractors tell us that they have coverage when, in fact, they do not. Get them to prove it by sending you a certificate.

When it comes to work like painting, or drywall. I would not be quite as worried about obtaining proof of coverage.

I hope that this information helps.