Most people never consider the need for an extra liability policy when having large projects such as painting done at their home. However, a lack of sufficient liability insurance can leave you financially exposed if a contractor were to get injured while working there. In this article, you'll learn to look out for danger signs and how to find the right policy for you. And we promise, no fancy legal words!
Laws and licenses for different types of trade work can vary even within the Atlanta metro area. But all homeowners looking to have contractors and skilled tradesmen work in their home need to be aware of the dangers an improperly or under-insured crew can pose. In short, if the contractor and any sub-contractors are not properly insured, they may try to come after you for damages arising from anything that happens to them or their equipment while on your property.
You should always ask prospective contractors for a copy of their general liability coverage. If they hesitate, move on to someone else. When you get a copy, be sure and look it over carefully and then call the insurance company listed on that form. The insurer or their agent can verify with you over the phone whether the policy is valid and if the stated amounts are correct. Unscrupulous contractors have been known to alter the coverage amounts to make it look like they are carrying more coverage than they are.
In general, you're looking for a policy offering $1 million of general liability coverage for the contractor and any sub-contractors they may employ. Each of those sub-contractors should really have their own coverage, but many of them do not. This raises another issue--that of health insurance for the sub-contractors actually painting your house.
A true story
Painting houses with more than one story can be hazardous. Painters are of course climbing on ladders, standing on scaffolds, or maybe walking on the roof to paint your house. They're carrying paint buckets, ladders, spray guns and brushes, and can be distracted by their work or a conversation with a fellow painter.
In one case, a painter was walking on the gently sloped roof of a sunroom while painting the second-story siding. As he was working, he did not notice how close he was getting to the edge of the sunroom roof and stepped off of it. He fell 12 to 15 feet, bounced off the outside air conditioning unit, and landed on the ground unconscious.
An ambulance was called and while not seriously injured, he did end up in Grady for two days for the various cuts and bruises and general trauma sustained in the fall. Neither he nor the painting contractor that hired him had health insurance coverage, even though they were paying on a workers' compensation policy. If a plaintiff's attorney who specializes in this kind of situation steps in at this point, both the homeowner and the contractor could be sued for either his injuries or his hospital bills. While not common, these types of suits do happen and are a tremendous drain on the homeowner's time and peace-of-mind, even if they rarely result in large monetary awards. If you have liability insurance sufficient for these situations, the insurance company is the one who has to deal with the suit, not the homeowner.
This worker actually left the hospital without being discharged because his friends came and told him that he would have to pay Grady for the services. It was, of course, several thousands of dollars, and he did not have that kind of money. In addition, he was an undocumented alien. His solution to the problem was to quietly leave the hospital and fly back home to Guatemala while he healed.
Since you can't really expect contractors and those working for them to have all the insurance they should have, protect yourself with one of two kinds of insurance.
An umbrella policy
The simplest and most comprehensive way to protect yourself from this and other situations where you could be sued, is to get what is called an umbrella liability policy. An umbrella policy is in addition to any policies you may already have and acts as a backstop to ensure that your assets and even future income are protected.
Umbrella policies are very inexpensive and usually start with $1 million worth of coverage. They will help protect you from many kinds of accidents that might occur on your property and for which someone might sue you. For instance, do you have lots of children's play equipment that lots of neighborhood kids use? Do you have a trampoline other kids can get on? Do you have any items in your yard or on patios or porches that are dangerous to touch, play with or climb on? An umbrella policy can protect you from a lawsuit if someone gets injured on any of these things.
A project policy
If you're having a really large project done or if your house is extra tall, you might even consider getting a policy that protects you for just that project. You should talk to your current homeowner's insurance agent to see how much coverage you have and to understand how much protection that offers. In addition, if your painting or home improvement project is really going to increase the value of your home, you might need more basic homeowner's coverage just to account for the added value.
Your best bet is to talk with your current insurance agent or the company that holds your homeowner's policy. They can show you all the options and help you find the liability policy that is best for you.