What insurance should a contractor have before working on my home?

Every contractor working on your home should carry three things: General Liability insurance (minimum $1 million per occurrence), Workers' Compensation insurance covering all employees and subcontractors, and a Surety Bond. Ask for a Certificate of Insurance (COI) and call the issuing agent to confirm the policy is active — certificates can be falsified or show lapsed policies.

What happens if a contractor doesn't have workers' comp and a worker gets hurt?

In most states, if a contractor's employee is injured on your property and the contractor lacks workers' compensation insurance, you — the homeowner — can be held liable for their medical bills and lost wages. Your homeowner's insurance policy typically does not cover this scenario. Always verify workers' comp coverage before work begins.

What is a contractor bond and do I need it?

A surety bond is a financial guarantee that the contractor will complete the job and pay their subcontractors and suppliers. If a contractor abandons your project or doesn't pay their lumber supplier (who could then lien your home), you can file a claim against the bond. Bonding is especially important for projects over $10,000 or where significant deposits are involved.

How do I verify a contractor's insurance is real?

Request a Certificate of Insurance (COI) directly from the contractor. Then call the insurance agent's phone number listed on the certificate — not a number the contractor gives you. Ask the agent to confirm the policy is current, the coverage amounts, and that it hasn't been cancelled for non-payment. This takes 3 minutes and is the most important verification step most homeowners skip.

Can a contractor's insurance certificate be fake?

Yes. Fraudulent or outdated certificates of insurance are more common than homeowners expect. A certificate showing a policy that was cancelled six months ago looks identical to a current one. The only reliable way to verify is to call the insurance agent directly at a number you look up independently, not one provided by the contractor.

Contractor Insurance 101: What Homeowners Actually Need to Verify

The Paperwork That Protects Your Home

When a contractor hands you a quote, the price isn't the only number that matters. The most critical documents they should provide before work starts are their proof of insurance and their bond. Without them, you become the insurer of last resort for everything that goes wrong on your property.

This isn't theoretical. Every year, homeowners face mechanics liens from unpaid suppliers, liability claims from injured workers, and unfinished jobs with no legal recourse — all because they skipped the insurance verification step.

The Three Documents You Need

1. General Liability Insurance

What it is: The "oops" coverage. Protects you if the contractor damages your property or causes injury to a third party during the project.

What it covers: A painter who spills oil-based paint on your hardwood floors. A roofer who drops a bundle of shingles through your garage roof. A window installer whose crew cracks your neighbor's windshield with debris.

Without it: You pay out of pocket and sue the contractor — a process that takes years and often yields nothing if the contractor has no assets.

What to look for on the COI: Minimum $1 million per occurrence, $2 million aggregate. Less than this is a yellow flag on larger projects.

2. Workers' Compensation Insurance

What it is: Medical and lost wages coverage for the contractor's workers if they're injured on your property.

What it covers: A roofer who falls off your ladder and breaks a leg. A plumber who's injured when a pipe bursts. Any crew member hurt while performing work on your home.

Without it: In most states, you can be sued by the injured worker because it happened on your property. Your homeowner's policy frequently excludes this — you may have no coverage and face the claim personally.

The subcontractor problem: General contractors often use subcontractors. The GC's workers' comp may not cover subs who carry their own policies — or who carry no policy at all. Ask specifically: "Does your workers' comp cover all subcontractors working on my project, or do each of them carry their own?"

3. Surety Bond

What it is: A financial guarantee of the contract.

What it covers:

The contractor takes your deposit and disappears. You file a bond claim to recover the funds.
The contractor completes the work but doesn't pay their lumber supplier. The supplier puts a mechanics lien on your home. A bond protects you from this lien.

What it doesn't cover: Poor workmanship or defects. The bond is a completion and payment guarantee, not a quality guarantee.

How to Actually Verify Coverage

This is where most homeowners stop short. They ask for a certificate, receive it, and move on. This is not enough.

Step 1: Request the Certificate of Insurance (COI) directly from the contractor.

Step 2: Find the insurance agent's contact information on the certificate — their phone number and company name.

Step 3: Call that agent directly using a number you look up independently (search the insurance company's website). Do not use a number the contractor writes on the certificate.

Step 4: Ask the agent three questions:

Is this policy currently active?
What are the coverage limits?
Has this policy been cancelled or had any lapses in the last 12 months?

This call takes three minutes. It is the single most important verification step that most homeowners skip, and it's the one that catches fraudulent or lapsed certificates before any work begins.