Are you thinking of renovating your apartment? Make sure to check what your liability is before you start work on any project. Be aware that if your contractor has insurance, it does not mean you will not be liable for something that happens. To protect yourself, you should take out your own insurance. Check your policy for these factors to make sure you are protected.
Insuring a building for construction is not easy. There are some policies that include language that excludes claims arising from construction and renovation. Find an advisor that will help you find a policy that will limit your risk while enhancing your protection.
Most contractors have their own insurance but do not take comfort in this fact. Many contractors’ policies include language that put the owners at greater risk. New York has strict labor laws and if a worker is injured on your property and your insurance policy includes injury exclusions, then you are exposed to significant liability. Review your contractor’s entire insurance policy to protect yourself by knowing if there are gaps in the policy that will not protect the owner.
Some insurance policies allow you to shift pure risk from yourself to the insurer in exchange for paying the premium. This is the classic way to reduce your risk. However, there are other ways to shift risk by arrange for you to be added as an additional insured on your contractor’s policy. To ensure you are properly transferring risk, have a contract with all parties that indemnifies you as the owner and holds you harmless and outlines what coverage and limits the contractor must have. Even if you get additional insured status and an indemnification clause, it does not mean that you will be fully protected. You should conduct an upfront risk review and analysis before the work starts to fill in any gaps in your risk protection.
You might want to get extended coverage because most commercial general liability policies expire at the end of the project but not all risk and liability end at the completion of the project. Some construction defects do not emerge until years later. Always seek a policy with extended completed operations coverage, which provides protection into the future in case there are unseen defects. Check for extended coverage that match your state’s statute of limitations.
Remember to check for the proper insurance that covers you to the utmost. A number of contractors do not carry proper insurance coverage and often have exclusionary wording. So protect yourself and do your research on insurance before starting a renovation project.
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