What You Should Know Before Hiring A Contractor

Whether you’re adding an office to your business premises or repairing a basement in your home, you will need to hire a reliable contractor. The contractor can make or break your project.
You have to find the right person, as this will make a huge difference in the timeliness and quality of the work. You will also have to deal with a considerably lower amount of emotional stress and financial tension once you’ve found the right person.
Getting Started
The first thing you need to decide is whether you need a general contractor, a specialty contractor, or an architect. A general contractor will look after the entire project from hiring subcontractors to getting building permits. He will also work on scheduling inspections. A specialty contractor will work on a small project like bathroom fixtures or building kitchen cabinets. An architect will be necessary for anything from designing a home to making major renovations in your office space.
There are, of course, many other types of contractors, depending on your projects. For instance, if you’re thinking of building a house, you may have to decide between a production home builder and a custom home builder.
Once you’ve made your decision, the next thing is to do your research. You can ask family, friends, neighbors, and people at work who they have used for their building or renovation work. Once you get a few leads, follow up by talking to them and asking about their experience. Spend time checking their qualifications, licensing, and business reputation.
Finally, before you decide on which contractor to hire, take the following four steps:

Step #1:  Get written estimates from several contractors. Don’t just look at the lowest bidder, but also at the quality of work.
Step #2:  Ask questions about how much experience they’ve had with project like yours.
Step #3:  Find out about the necessary permits.
Step #4:  Ask for a list of references and follow up on them.
Step #5:  Verify that your contractor has insurance and that you understand the various policies involved.

Covering Risk
All construction contractors coming to work on your property should have insurance to protect themselves and your company. Insurance is essential to cover any losses caused by accidents.
While it’s the contractor’s responsibility to find, buy, and keep the necessary insurance coverage for the entire time they work for you, it’s your responsibility to approve of their insurance. The insurance policies should also have a waiver of subrogation in favor of your business, and your company should be named as additional insured.
When reviewing insurance, you have to take a close look at coverage and standard limits, types of insurance, certificate of insurance, and the subcontractor’s insurance coverage.
Coverage and Standard Limits
You have to decide on the type of insurance coverage and standard limits you believe are necessary for the work. You also have the right to ask to have the minimum acceptable coverage limits increased if the nature of the work changes. The size and scope of your contract will be based on the potential risk exposure, and it is this that will decide on the minimum coverage necessary.
Types of Insurance
Here are some examples of types of coverage you may need to think about:

1. Commercial General Liability should include:
•  Personal Injury Liability
•  Independent Contractor’s Liability
•  Contractual Liability
•  Product Liability
•  Completed Operations Liability
•  Property Damage Liability
2. If hiring professionals like consultants, engineers, or architects, you will need Professional Liability to cover claims for errors and omissions.
3. If hiring tradesmen for improving facilities, renovation, or construction projects, you will need Builder’s Risk Insurance.
4. If hiring people for projects that have special circumstances attached to them, unusual hazards, or unusually large scope, you will need Excess, Umbrella and Specialized Insurance.

Certificate of Insurance
It’s not enough, of course, to receive verbal affirmation of insurance, you should ask for a Certificate of Insurance. This is a document an insurance company issues to offer proof of an insurance policy. You must see and approve of these standard documents before any work begins. These certificates must verify waiver of subrogation in favor of your company, indicate your company as additional insured, and specify that your company will be notified in writing thirty days prior to changes in coverage or in the event of a cancellation.
If the nature of the work changes and the insurance policies become insufficient or the insurance company is discovered to be unsatisfactory, the contractor will have to get another policy and submit an entirely new Certificate of Insurance.
The Subcontractors Coverage
The contractors insurance should include all subcontractors as insured under the policy. The alternative is for each subcontractor to provide a separate Certificate of Insurance.
Hiring a contractor is not simple, and it’s not something you should do quickly and carelessly. You have to do your due diligence to screen the right person. Then after finding the right person, you also have to understand what laws apply and what insurance is necessary for your project.