Tis the season for furnace break downs, clogged fireplace flues, and frozen pipes! Yes winter is coming and we’re talking about hiring out home repairs.
If you need to call on a contractor, plumber, electrician, HVAC repair, or other service professional, we recommend you make sure to check on their insurance before they start the work.
We understand this goes without saying that any reputable company will be up-to-date on their coverage, but if you’re not familiar with the business, it’s always best to check. Ask for certificates of insurance – and check the dates to make sure they are current. Below we explain what the terms insured, licensed, and bonded mean:
Liability insurance, as we’ve talked about before covers damage to other people and their property. If a repair person damages your property through an accident, negligence, or causes harm, their liability coverage kicks in to pay you recompense.
Licensing refers to any specific state licenses that a contractor or other skilled trade professional carries to comply with certain requirements. In Nebraska all contractors and subcontractors are required to register with the state.You can search by name on the Nebraska Department of Labor website.
In Iowa contractors are not required to register if they earn less than $2000 per year as construction workers, but if the business provides plumbing, HVAC, refrigeration, or similar mechanical services they are required to register with the Plumbing & Mechanical Systems Board. Visit the Iowa Division of Labor and the Plumbing & Mechanical Systems Board to verify you are working with a reputable company.
Bonding carries an extra measure protection for the consumer. A bond is really just a promise from the contractor they will comply with the terms of the job contract.
The contractor agrees if they fail to complete the work as outlined in the bond, they have to forfeit the money and pay up.
The contractor pays a sum of money to be bonded by an insurance company who in turn looks at their credit, work experience, and other related factors to determine if they are a good risk. If so, that company agrees to hold the money in case a claim arises. According to JW Bond Consultants, Inc., think of the bond as a combination of insurance and credit.
For example, let’s say you hire out to have your bathroom remodeled and before the job is done, the contractor and his crew skip out, leaving your bathroom in shambles.
While their liability insurance won’t cover incomplete work, a bond could mean you are eligible to recoup money for the contractor not completing the job.
Most bonds are issued to contractors who want to do work for local governments or large companies who require a bond, but some contractors do purchase bonds to give them an extra measure of credibility.
Always ask your contractor or other skilled professional for proof of insurance, special licenses, and bonds. A reputable business will be happy to provide the information to you!
So now that you know what to look for in a contractor, check out the list of resources below for more information. We insure many reputable contractors who are bonded! If you ever need a recommendation or referral, don’t hesitate to contact us!