How to Use a Contractor With No Insurance

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You’ve found a contractor, seen his work, heard rave reviews about him and want to hire him for your project. However, he doesn’t carry general liability insurance, and you want to protect your financial investment. There are states and communities that don't require a contractor to carry insurance. If the contractor you've chosen doesn’t, you can still work with him. However, it's advisable to take cautionary measures to protect yourself.

Check the contractor’s references carefully and ask former clients about the contractor’s safety practices. If you’re going to use an uninsured contractor, minimize your risk by making sure he's responsible.

Contact your homeowner’s insurance agent to determine what type of damages your policy covers.

Ask to see insurance certificates from subcontractors. Often the contractor will hire out some of the specialty work, such as plumbing, wiring and roofing. If these subcontractors have insurance, you’ll be better protected.

Purchase a builder’s risk policy if you’re building a new home or undertaking a major remodel. This is an individual policy for a period of one year that covers your investment in materials and labor if damage, vandalism or theft occurs.

Ask the contractor and the workers to sign a waiver that releases you from all responsibility for injuries that occur during construction. Use a separate form for each worker. An attorney should write the waiver.


  • Even the most careful contractors can have accidents. If he’s not insured, make sure you are.

    If your state requires that all contractors carry insurance, don't use an uninsured contractor.


  • Ask for proof of worker’s compensation. Unlike general liability insurance, a contractor must carry worker’s compensation on his crew. If he doesn’t carry worker's comp, use another contractor.



About the Author

Glenda Taylor is a contractor and a full-time writer specializing in construction writing. She also enjoys writing business and finance, food and drink and pet-related articles. Her education includes marketing and a bachelor's degree in journalism from the University of Kansas.

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