Check him out to make sure coverages are adequate and current.

If you are going to do it, I would strongly recommend a written contract, get an estimate from him, pay only per the contract (not hourly, daily, etc), Require General Liability, Workers Comp (including coverage for him) and Auto Liability

Should we look at increasing the liability coverage on the rental instead?

And what coverage do you recommend for a condo that will be rented for short or long term?

@Eldridge Stroman Talk with your insurance agent, but you'll probably want vacant property coverage and builder's risk.While you're rehabbing, takes steps to guard against having tools and building materials stolen. 

Do you all still suggest umbrella insurance, if so recommendation of coverage amounts?  

Get an umbrella insurance with $1M coverage instead, its very cheap and hard to imagine you get sured for over $1M - and loose! 

Michael,From an insurance standpoint I would suggest discussing with your Insurance Agent the things that will be a problem when placing the coverage.  

Also, did this include liability coverage, or are these premiums below for property only?

Corbin,From an insurance standpoint, the contractor must have Liability, auto coverage, and Workers Comp. coverage.