How to Make Sure Your Contractor is Insured in Metro Detroit

You’ve wanted to renovate your cramped, outdated kitchen for ages. Or perhaps you are deciding between staying in your home after major damages or selling and walking away from some potential pricey repairs. Like many, asking around among friends and co-workers may initially help find and hire a contractor, but making sure your contractor is insured in Metro Detroit is of vital importance.

Things can go downhill fast—and become shockingly expensive—if your contractor isn’t properly insured. Imagine this: something goes wrong on the job, and suddenly, you’re stuck in a tangled web of legal disputes and unexpected repair costs that you never saw coming. It can turn what should be a straightforward project into a stressful, drawn-out nightmare.

But here’s the good news—you can sidestep all that hassle. The best way to protect yourself is to ensure that your contractor is both reputable and fully insured before any work begins. By doing your homework upfront, you can avoid those potential headaches and feel confident that, even if things don’t go as planned, you won’t be left holding the bag for costly repairs or legal battles. It’s all about being proactive and making sure you’re covered from the start!

Difference Between Bonding and Insurance

When a contractor says they’re “bonded and insured,” it’s a sign that they’re taking responsibility for their work and offering you some peace of mind. But what does that really mean for you as a homeowner?

Let’s break it down. Being bonded means the contractor has a surety bond in place. This bond acts like a safety net for you. If the contractor doesn’t finish the job or does sub-par, sloppy work, the bond steps in to cover the costs of completing or correcting the project. So, if things go south, you won’t be left scrambling to come up with the money or dipping into your homeowner’s insurance to fix what went wrong.

Now, insurance is just as important. A contractor’s insurance protects you in two major ways. First, if any damage happens to your property during the project—whether it’s accidental or otherwise—you won’t be responsible for covering the repairs. Second, and equally crucial, it shields you from liability if a worker gets injured while working on your home. Without this protection, you could be facing legal or medical expenses that aren’t yours to pay in the first place.

In short, when a contractor is bonded and insured, it’s their way of guaranteeing that you’re protected against potential mishaps, so you can feel more secure when moving forward with your renovation project.

What Kind/How Much Insurance?

Ensuring your contractor is insured in Metro Detroit is a crucial first step, but it’s not the whole story. It’s equally important to make sure they have adequate coverage and the right types of insurance to fully protect you and your property.

Here’s a scenario to consider: Let’s say your home is valued at $1.5 million, but your contractor’s insurance only covers up to $500,000 in damages. That’s a huge gap in coverage, and if something went seriously wrong, you could be left footing the bill for the remaining amount. This is why checking the contractor’s coverage limits is essential. You want to be sure their policy covers the full value of your home—or at least a large enough amount to avoid any costly surprises.

Don’t hesitate to ask for proof of insurance and to confirm the details of their policy, such as coverage limits and what types of incidents are covered. The last thing you want is to find out after the fact that the insurance wasn’t sufficient to cover a major mishap. Better safe than sorry, especially when it comes to protecting your most significant investment—your home!

Your contractor should carry general contractor liability insurance comprising the following types/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, precisely, can you make sure your contractor is insured in Metro Detroit? There are several steps you can take mitigate your risk and make sure you’ve chosen a reputable, fully insured contractor.

• Check out the contractor with the Better Business Bureau
• Check references and talk to former customers
• Have a formal in-depth meeting with the contractor before signing any contract
• Ask to see insurance and bonding documents
• Get everything in writing – all aspects of work to be done, work milestones and payment schedule, completion date, contingency clauses, and so on

How Does Your Contractor Deal With Subcontractors?

Let’s say you’re adding a room to your home—sounds exciting, right? But here’s something you may not have considered: the general contractor you hire will likely bring in subcontractors to handle specific tasks like framing or bricklaying. And that raises an important question: Are the subcontractors insured?

Here’s the issue: sometimes, subcontractors are hired on a cash basis, with no official record linking them to the general contractor. This can be risky because if they’re not officially employed, they might not be covered by the general contractor’s insurance (or bonding). So, if something goes wrong—whether it’s shoddy work or an accident—you could find yourself unprotected.

To avoid this, when you’re verifying the contractor’s insurance, it’s just as important to ask how they handle subcontractors. Are the subs covered by the contractor’s policy? Do they have their own insurance? Don’t be shy about asking for documentation. This small step can save you from potentially big headaches down the road.

Also, a local real estate professional can be an excellent resource in finding reliable, insured contractors in Metro Detroit. They often have connections and can help point you in the right direction, ensuring that your home project goes smoothly and without unnecessary risks.

If you’re still feeling overwhelmed and want to walk through all of your options, we would be glad to assist you! Feel free to contact us by phone at (313) 246-4551 or fill out our contact form to get in touch.