Why You Should Get Liability Insurance for Your Home Renovation Project
When you're thinking about starting up a renovation project in your home, always make sure that you are covered by the proper insurance policies in case problems come up. Why is insurance so important? How can you be sure that you are covered for all types of situations? RenoQuotes.com is here to help make things less confusing:
In an ideal world, home renovation projects would always run smoothly and the results would always live up to the your expectations. Unfortunately, problems do happen and if you and/or your contractor don't have the proper types of insurance, the situation could turn out badly and you might lose a lot of money in the process. When planning to undertake a large-scale renovation project, the second person you should call (after the contractor) is your insurance company.
Ask them if your liability insurance covers this type of work. If you are completing the renovation project yourself, without the help of a licensed contractor, it is unlikely that you will be covered. Also, before you sign a contract with an entrepreneur, check to see if they have the licences that are required for the type of work they will be doing and see if these licenses are still valid. In Quebec, you can search on the Régie du bâtiment du Québec's website.
Check that your liability insurance covers home renovations
Every insurance policy is different. Knowing exactly what is included in yours will help you make sure that no matter what types of changes you are making to your house, you will remain protected against any financial liabilities. Even though it might not be a fun thing to do, we recommend that you read your whole insurance contract, including (especially!) the fine print.
Insurance contracts tend to include clauses that explain how various situations could be excluded. For example, some insurance policies could be nullified if you do not live inside your house during renovations. In this particular case, you need to contact your insurance company to discuss which options are available. Generally, you should be able to ask for a vacation permit. This permit will cover the period of time when you will be away, so that your house is still insured.
Even if you are extremely diligent, unexpected situations may occur! You never know: your contractor could discover a few surprises when they start tearing down parts of your house. If the building is old, they might find materials which were widely used in the past but are now considered toxic (such as asbestos).
These surprises may cause your insurance fees to increase. Lastly, since the house work will most likely boost the value of your house, once the work is done, you will have to provide receipts to your insurance company. In turn, they may ask to reevaluate your insurance premiums.
The contractor’s insurance policy
Once you are sure that your house will be covered during your renovation project, it's time to check if your contractor is also well protected. Your insurance will cover certain situations but in other cases, responsibility will fall squarely onto the contractor's shoulders. In Quebec, licenced entrepreneurs already benefit from a certain amount of protection. However, they also need to get a third-party liability insurance, which will cover them if, for example, an accident were to happen on the work site. This is particularly true if the accident is caused by the contractor or by one of their employees.
According to the Civil Code (article 2120) a contractor should guarantee the quality of their work for at least one year in case problems arise. Article 2120 says: "The contractor, the architect and the engineer, for the work they directed or supervised, and, where applicable, the subcontractor, for the work he performed, are jointly bound to warrant the work for one year against poor workmanship existing at the time of acceptance or discovered within one year after acceptance."
In order to claim this right, you need to sign a written contract with the contractor. This contract needs to include plenty of detail and both parties need to sign it and keep their own copy. This paper contract will stand as proof. Also, be aware that licenced entrepreneurs need to give caution money to the Régie du Bâtiment du Québec (RBQ). This caution money is given by every entrepreneur applying for a license.
The money can be used as compensation if you can prove that the results of the work completed by the contractor aren't satisfactory. The amount of money required by the RBQ is $10 000 for general contractors and $20 000 for specialized contractors
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