Installment #11 Insurance Issues for The Real Estate Investor - Workers Compensation - Continued

[Ivan Oberon]

Installment # 11 – Insurance Issues for The Real Estate Investor

Workers’ Compensation – Continued

Pertaining to hiring contractors and third-party service providers, be certain that they carry not only “General Liability” (GL) coverage, but also current WC coverage, whether State-sponsored or from a private insurer. The best time to obtain such validation of coverage is at the onset of the bidding process. Once Certificate(s) of Insurance (COI) are secured from the contractor or service provider a quick phone call (or email, which I prefer as it creates a “paper trail”) to the carrier or Agent can confirm the coverage(s) are current and valid. Being named a “certificate holder” is typically sufficient for most scenarios, especially when you do not utilize a contractor more than a few times a year. For larger/longer term jobs and projects, being named as an “additional insured” may be preferred. Put simply, a certificate holder is simply notified in the event the policy cancels. An additional insured not only is notified when the policy cancels, they are actually protected by the coverage/policy. Review with your legal advisor, and be advised that being named as an additional insured may cost the contractor some additional premium, usually no more than $50-100 per year. Depending on the situation, it may behoove you to pay this additional premium, if the contractor “balks”. My attitude is “no insurance, no project award”. If the contractor or service provider decides to cut expenses by sacrificing these vital coverages, then I do not want them doing any work for my business.