A workplace accident is always a possibility. If it were to happen during a construction project on your property, you might have to compensate workers for their injuries or, in some cases, a fatality.
You can protect yourself from legal claims by making sure your contractor has insurance and a license bond.
Workers’ Insurance Policies vs. License Bonds
Both can shield you against compensation claims. The main difference between the two is that you can benefit more from a license bond while a contractor stands to gain more from insurance. Although workers’ compensation insurance can still provide some form of protection for homeowners.
License Bonds
Before a contractor can obtain their license, they need to apply for a license bond first. A license or surety bond is a contract that involves three parties: the contractor (the principal), the state licensing agency or board (the obligee), and an insurance company (the surety).
Here’s how a license bond can protect you: suppose a contractor accidentally damages your property or doesn’t finish a project satisfactorily, the obligee, or, in this case, the state licensing body, will file a compensation claim with the surety, the insurance company. Once the funds are released, the contractor will have to reimburse the insurer.
In a sense, the bond is a guarantee that the contractor will do a proper job. Otherwise, they’ll end up paying a premium. Just make sure your contractor truly has a bond. Ask for a copy of their license – a prerequisite for obtaining a surety bond – and a certificate of bonding as well as details about the bonding organization.
Workers’ Compensation
A workers’ compensation insurance policy will shield the contractor – and you by extension – from compensation claims in case there are workplace injuries or fatalities.
Minimizing the Risk of Accidents
You can’t rule out the possibility of accidents happening, but there are ways you can reduce such a risk. One of them is hiring an experienced contractor. Whether you’re hiring a remodeler or a storm damage company, make sure to do your research.
Looking for an experienced contractor in your area?
Dynasty Restoration Inc. offers a wide range of professional renovation services, including storm damage repairs. To get a free estimate, call us at (402) 205-2877, or fill out the form on this page.
