You’ve been wanting to renovate your cramped, outdated kitchen for ages. Or perhaps you’re deciding between staying in your home after major damages or selling and avoiding some potentially pricey repairs. Like many, you may initially ask friends and co-workers for recommendations to find and hire a contractor, but ensuring your contractor is insured in Dallas – Fort Worth, Texas is of vital importance.

Things can get ugly – and shockingly expensive – if your contractor isn’t insured. If issues arise, you could face prolonged disputes, costly repairs out of your pocket, and far more stress than you anticipated. However, you can avoid this by ensuring your contractor is reputable and fully insured.

Difference Between Bonding and Insurance

Most reputable contractors describe themselves as “bonded and insured.” But what does that really mean?

A surety bond guarantees your protection if the contractor fails to complete the project or delivers sub-par, shoddy work. This bond ensures you won’t have to use your own money or homeowner’s insurance to cover the costs in such situations.

A contractor’s insurance shields you from the costs of damages and lawsuits. If any damage occurs to your home during the renovation, you (or your insurer) won’t be responsible for the repairs. Additionally, if one of the contractor’s employees is injured while working on your project, you won’t be held liable.

What Type and Amount of Insurance?

Taking steps to ensure your contractor is insured in Texas is just the beginning. You also need to verify that the contractor has adequate coverage and the right types of insurance.

First, would the contractor’s insurance cover significant damage to your home? For instance, if you live in a $1.5 million home and your contractor’s insurance only covers $500,000 in damages, you should probably continue your search for a contractor with more comprehensive coverage.

Your contractor should have general liability insurance that includes the following types and levels of coverage:

• Liability insurance – Covers injury to you or your family and protects you from lawsuits
• Workman’s Comp – Protection for the contractor’s employees in the event of injury (not required in all states for smaller contractors, so you’ll need to ask)
• Property damage – Covers damages to your home during the course of the project

Steps You Need to Take

But how can you ensure your contractor is insured in Texas? There are several steps you can take to mitigate your risk and confirm that you’ve selected a reputable and fully insured contractor.

• Verify the contractor with the Better Business Bureau.
• Check references and speak with previous customers.
• Hold a formal, detailed meeting with the contractor before signing any contract.
• Request to see insurance and bonding documents.
• Ensure everything is documented in writing, including details of the work, milestones, payment schedule, completion date, and any contingency clauses.

How Does Your Contractor Deal With Subcontractors?

For instance, if your remodeling project involves adding a room to your home, the general contractor will likely hire subcontractors for tasks like framing and bricklaying. However, are these subcontractors insured?

Sometimes, subcontractors are hired on a cash basis without formal documentation, which means they may not be covered by the general contractor’s insurance or bonding if problems occur. Therefore, alongside verifying your contractor’s insurance, it’s important to understand their policies regarding subcontractors.

Ensuring that your contractor is insured in Texas is essential for any significant work done on your home. Local real estate professionals can also be a valuable resource when evaluating contractors.

If you’re still feeling overwhelmed and would like to explore all your options, we’re here to help! TX Home Buying Pros is ready to assist you. Please contact us by phone at (214) 296-2343 or fill out our contact form to get in touch.