How to verify a contractor's insurance before work begins

Contractor insurance is the item on the pre-hire checklist that homeowners most often wave through. The contractor says "yes, we are fully insured," hands over a certificate, and the conversation moves on. The certificate is often real. Sometimes it is not. Sometimes it is real but expired. Sometimes it is real and current but the coverage limits are inadequate for the project.

Fifteen minutes of verification prevents the situation where a crew member is injured on your property and your homeowner's policy becomes the deepest pocket in the room.

The three policies that matter

General liability insurance

Covers property damage and third-party injury caused by the contractor's work. If the crew puts a saw through your hardwood floor, or a tile saw overflows and ruins the subfloor, general liability is what pays for the repair.

Minimum coverage for residential work in Massachusetts is typically $1 million per occurrence, $2 million aggregate. A contractor writing a $2 million kitchen addition should probably carry more. Ask to see the policy limits on the certificate.

Workers' compensation

Covers injury to the contractor's own employees while they are on your job. In Massachusetts, workers' compensation is statutorily required for any business with employees. Sole proprietors can exempt themselves under certain conditions, but only for their own coverage, not for anyone working alongside them.

This is the single most important policy to verify. Without workers' comp, an employee injured on your property can sue you directly as the property owner. Your homeowner's policy may or may not respond. The lawsuit happens either way.

Umbrella or excess liability

Sits above general liability and provides higher coverage limits on a single policy across multiple underlying policies. Not every contractor carries it. For projects over $100,000 or anything involving roof work, excavation, or heavy demolition, an umbrella is a reasonable thing to expect.

The certificate of insurance

A certificate of insurance is a one-page document produced by the contractor's insurance agent that lists the policies, effective dates, carriers, and limits. You want one before work starts.

Things to verify on the certificate:

• The named insured matches the name on your contract. If the contract is with one entity and the certificate shows a different name, that is a problem.
• The policy types are listed: General Liability, Workers' Compensation, and (if applicable) Umbrella.
• The policy effective dates cover the duration of your project. A certificate expiring three weeks into a twelve-week project is not adequate.
• The limits are appropriate. $300,000 per occurrence is not enough for most remodel work. $500,000 is acceptable for small jobs; $1 million is standard for meaningful residential remodeling.
• The carrier is a real insurance company. Legitimate names you will see in Massachusetts residential construction include Travelers, Liberty Mutual, The Hanover Insurance Group, AIM Mutual (popular for MA workers' comp), and State Auto. If the carrier is an unfamiliar name, look it up.

A contractor cannot generate a legitimate certificate themselves. The certificate is produced by their insurance agent, and the agent is named on the form. If the agent's phone number is on the certificate, that number is your fast path to verification.

The five-minute verification call

Call the number on the certificate. Tell the agent you are a homeowner about to contract with their insured, and you want to confirm the policy is active and the limits are as stated.

Agents get these calls regularly and will confirm without violating any privacy rule. What you are specifically trying to confirm:

• The policy is current and has not been cancelled.
• The effective dates on the certificate match what the agent's system shows.
• The limits on the certificate match what the agent's system shows.
• You can optionally ask to be added as a "certificate holder." This does not extend coverage to you, but it does mean you will receive a notice if the policy is cancelled during your project.

Some homeowners ask to be added as an "additional insured." This is a stronger position than certificate holder. It means the contractor's policy extends to cover you as a named insured for claims arising from the project. It is a real ask and a real negotiation. On a small cosmetic job, most contractors will not do it. On a meaningful structural or exterior project, it is reasonable to request.

Red flags

• "We don't need workers' comp because we use subcontractors." Maybe true. Ask to see each subcontractor's workers' comp certificate. If the contractor cannot produce them, you are the de facto employer of the subs under Massachusetts law.
• A certificate dated six months ago that "is still current." Coverage can be cancelled mid-term. Get a fresh certificate or verify by phone.
• A certificate that lists only "liability insurance" without distinguishing general liability from workers' comp. This is either sloppy paperwork or incomplete coverage. Get clarity.
• The contractor bristles at the question. A contractor who runs a clean operation is used to this conversation. A contractor who has not been asked before is a different sort of data point.
• The certificate is from a state other than Massachusetts. Out-of-state contractors can operate in MA, but their workers' comp must be on a Massachusetts-filed policy. Out-of-state workers' comp does not cover injuries on a Massachusetts job site.

If you find a gap

You have three options:

1. Ask the contractor to add the missing coverage before the project starts. Most carriers can add a rider or increase limits within a few business days. This usually costs the contractor a few hundred dollars and is the right answer for a project that should happen.
2. Accept the gap in writing, and price the risk. This is what sophisticated construction clients do on commercial projects. It is almost never the right answer for a homeowner.
3. Hire a different contractor. This is usually the correct answer when the gap is workers' comp specifically.

Insurance is the first place to find out whether a contractor runs a real business or a shell. A contractor with clean, current, correctly-scoped insurance is telling you something about how the rest of the job is going to be run.