General Liability Insurance
Posted on 02/08/2013 at 12:19 PM by Dawn Gee
General Liability Insurance – Essential Property Protection the Roofer Should Provide
You often hear horror stories about people thinking they’re going to save some money on fixing their roof when somebody comes to their door and says, “Hey, I just happened to be looking at your roof, and I want to help you out.” That’s not the way to go. Instead, go with a professional like Bakeris Roofing who has general liability insurance. So what is it, how does it work, and how can you be sure it’s correctly in place for you?
General liability insurance is just plain essential. It’s insurance that the contractor has, to cover damage to your property while he’s there – the belongings on the property, the home, and the home’s surroundings. Otherwise, it comes back on the homeowner: you’re going to have to pay for the damage, and maybe your homeowner’s insurance can’t cover it. That should never happen: the contractor should already have it covered by their general liability insurance. And the homeowner should be sure the roofing contractor has enough general liability insurance. In a moment, I’ll talk about how much is enough. By the way, general liability insurance doesn’t cover the workers who come to your house – that’s worker’s comp, a different kind of insurance policy, something I’ll talk about in an upcoming blog post.
Let’s get into some examples. Say a worker drops a bundle of shingles and it falls down through the roof, down through the ceiling, and onto the kitchen table. General liability insurance is going to cover the resulting damage to the property.
Here’s another one. The homeowner hires XYZ Roofing Company, who shows up and starts working on the house. Let’s say they tear off the roof, but then it starts to rain. The rain goes into the second story of the house, floods out the second story, and goes into the ceiling. It keeps on raining hard enough that next it’s running down the walls to the first story. Quite a bit of damage results – even the top of great grandma’s old china hutch gets soaked, something that can never really be replaced. If the contractor doesn’t have enough general liability insurance, paying for this damage can come back on the homeowner – whether or not the homeowner’s insurance covers it.
In the first place, if you’re hiring the right contractor, you should never have to worry about that. That should never even come into play. Why should you, the homeowner, be covering my butt, so to speak, because I don’t have the proper insurance? Even though you hire me and I tell you what you want to hear about insurance, you should do some due diligence yourself. If I don’t have the proper insurance, you’ll just be making yourself the general contractor – you’ll be responsible, instead of me, without even realizing it.
When I sit down with people in their house, I always explain our general liability insurance and our coverage. First of all, there has to be the minimum coverage required by law. I think the minimum in Iowa is $50,000. But the minimum is not enough. When someone shows up at your house with only $50,000 worth of general liability insurance, send them right back out your door. Remember that torn-open roof? And it does rain? It comes right down through the insulation and it gets all that wet. It rains so hard it spots your drywall and maybe even causes it to drop. Next thing, water is landing on your furniture, on your bed – $50,000 won’t even begin to clean up the mess that the roofing contractor has made.
For residential roofing, the minimum should be at least $1 million. For commercial roofing, it’s $2 million, so $1 million is the minimum I would want to see from a contractor when they came to my house. In fact, at Bakeris Roofing, not only do we carry the $1 million, but we also carry another $1 million umbrella policy on top of that. So we carry $2 million in general liability insurance for residential roofing. We have the homeowner more than covered.
I mentioned that the homeowner needs to do a little due diligence, too. I always tell people, when our roofing specialists show up at their house, they’ll get our little packet about Bakeris Roofing. It has our certificate of general liability insurance. It’s got our insurance agent’s number, too – they can call them. I always encourage them to call, because printed insurance certificates can easily be faked these days. If the homeowner feels anything is questionable, I always offer to have our insurance company send our certificate of insurance directly to their house, in the insurance company’s envelope and with their company letterhead on it. I don’t just hand them the certificate, I encourage them to double check for themselves. Sometimes they’ll do it right there; they’ll call the insurance company and we put them on speakerphone.
Realistically, it’s too easy for contractors to change things like the date of expiration. And don’t just check on the insurance before the roofing work starts. I’ve had homeowners tell me about times they thought they had checked things out correctly and were safe, but weren’t. For example, after checking that the contractor had general liability coverage, a homeowner paid for the first month of the contract. But then the contractor dropped the general liability insurance coverage, continued to work, and continued to get paid.
So, you want to make sure, if you have any questions or doubts, that you at least call the contractor’s insurance company and make sure they have coverage, and even better, continue to check that they are covered for the same amount that’s on their policy’s certificate of insurance. You need to know right away if it is a professional business, and if there’s an actual insurance company. And then ask more questions when you do call their insurance company: What’s the contractor’s federal tax ID number? Where is the roofing business located?
Please remember that general liability insurance is very important. You have to check on it thoroughly. I’d rather you didn’t have to learn it the hard way.
If you have any questions, feel free to call me at Bakeris Roofing, at 515-967-8199. Bakeris Roofing has been providing safety, security, and comfort in the Des Moines area and the surrounding communities for over 20 years.