All professional contractors and service providers are required by law to carry insurance to cover their activities. All condo buildings and associations should also carry their own insurance to cover accidents or other incidents on the property—this could include anything from slip-and-falls to staff injuries to damage from doing electrical work.
The latter is important to help minimize risk. Lawyers advise that you can’t always control your vendors’ and contractors’ safety habits, and negligence claims can easily end up in court and out of your hands, so it pays to make sure you don’t expose your condo association to serious liability and expense.
Are you Covered?
According to Michael Colman, managing partner of JGS Insurance in Holmdel, New Jersey contractors -- along with all other companies (save for sole proprietors) -- are required to have workers' compensation insurance in his state. However, general liability is not mandatory.
An association must verify a contractor’s insurance coverage prior to allowing them on the premises. An insurance certificate showing proof of general liability, workers compensation, commercial auto insurance and/or umbrella liability should be provided. So what should you see on the certificate?
“They should be current. They should have good limits of liability—at least $1 million per occurence,” Joseph Rice, CIC, of The Rice Agency in Somerville, New Jersey says.