Does Your Homeowners Insurance Cover Contractor Accidents?

If a burglar breaks into your home and steals your valuables, you probably know your home insurance policy would cover you. Similarly, if you left a candle burning and a house fire started, your policy would cover any resulting loss or damage. However, the coverage isn’t quite so universal and clear cut when it comes to contractor accidents. For instance, if while fixing your electrical system a contractor started your home on fire, would your policy cover the mishap? Or if the contractor damaged your next-door neighbor’s fence with equipment during a job, would you have any protection against the liability exposure? These are much more difficult questions, and the answer isn’t always “yes.”

Coverage Varies by Policy

Homeowner’s insurance is a unique type of insurance because the events covered by a policy can vary substantially. More comprehensive policies cover many different perils, possible even contractor accidents. However, other policies come with itemized lists of the events they will and will not cover. If contractor accidents are not on the list, you have no coverage for this event. Usually, policies that come with specific lists of covered events will not cover any perils caused by contractor accidents.

What to Do before the Contractor Begins

Don’t put yourself in the precarious situation of allowing a contractor to begin a job without first ironing out coverage details with your home insurer. Here is what you should do before giving the contractor the green light to begin work:

1. Contact your home insurer to verify coverage. To be sure that contractor accidents are covered by your homeowner’s insurance policy, call your insurance agent, company, or representative.
2. Provide your insurer with detailed information about the nature of the work. When you call your insurance agent, provide as many details as you can about the contractor and the work to be performed on your house. You should provide the contractor’s name or the company’s name, the exact nature of the job to be done, and any other pertinent information.
3. Get it in writing. If it turns out that your policy does cover contractor accidents, ask your agent to send you confirmation of the coverage in writing.
4. If you don’t have coverage, purchase it. Most home insurance companies allow you to purchase additional protection in order to cover contractor accidents. If you have this option, purchase the coverage.
5. After updating your policy, request a written copy. If you updated your coverage to include contractor accidents, make sure you get a copy of your new policy in the mail. Check it to make sure it does actually specify coverage for such perils.

Doesn’t the Contractor Have Insurance?

Yes, theoretically, general contractors have to have liability insurance before they can start working a job. You have the right to ask the contractor to demonstrate proof of liability insurance if you would like to verify this. However, even if your contractor does have some coverage or is fully insured, you may still have liability exposure. For this reason, you’re better off protecting yourself completely by adding a provision to your existing homeowner’s insurance policy than relying blindly on the contractor’s liability insurance.