When Hiring a Contractor from an Insurance Agent’s Prospective*

When hiring a contractor to perform work for you, be it as a homeowner, real estate agent or contractor, it’s a good idea to practice safe hiring says Steve Valencia owner and founder of Athena Insurance and Financial Services.   The following information is a quote from the *Broker.

“First let me start with a disclosure.  The statements I am about to make are not meant to be the absolute rule on hiring and best practices. Why? The reason is there are “many” various laws and the laws vary from State to State.

The insurance “contracts” provision within “endorsements, exclusion, term and conditions” of perils coverage vary not only State by State but also Insurance policy by Insurance policy and each insurance carrier may have a variance. But, in general I will discuss how a Consumer may want to follow these guide lines.

  1. When hiring a Contractor always verify that they have a valid license for your State “if one is required.”  In the State of California for example, the regulations requiring licensing and bonding are provided by the California State Licensing Board. “CSLB”  You may view the California State Licensing Board Web site here.
  2. Always have a written estimate
  3. Always require the contractors to have the following types of insurance:
    1. General Liability – General liability covers their operations but not coverage for workers or commercial auto and there are more excluded operations.
    2. Workers Compensation – If the contractor has any employees, helpers, volunteers or even sub-contractors. This is very important
    3. Business Auto – although not “as necessary” as the others, it is still a good idea.  Contractor’s that are protecting themselves and the public will already have this kind of insurance because “personal auto” excluded business usage for most contractors.
  4. IMPORTANT! You must be named as an “Additional Insured” on all three of the types of policies listed above. You want to have in your possession “before” allowing the work to begin a Certificate plus the endorsement naming you “Additional Insured” by name.  The exception on the “endorsement and name” is.. if they have a form entitled “Blanket Additional Insured.”




* Ace911.com and S Valencia are not responsible for any miss-representations or statements offered by Athena Insurance and Financial Services or it’s Broker. We have confirmed that the Broker is licensed in the State of California with Insurance license number #0588258 and National Producer License number 2709340.  More information can be found on their web site at AthenaInsurance.com.

Furthermore, the information provided by the Broker is “generalized” representation and not necessarily meant to “your” particular circumstance. For “specific” information regarding you and your projects consult with your agent or attorney.