Accidents during renovations are not uncommon, and to protect yourself and others, there are several types of renovation insurance that homeowners should consider purchasing. When it comes to home renovations, there are generally three types of insurance to be aware of: third-party liability insurance, renovation project insurance, and labor insurance.
Third-Party Liability Insurance:
Also known as public liability insurance, it covers the legal liability of the insured party for injuries, deaths, or property damage to third parties caused by negligence, excluding employees. While it is voluntary for homeowners to purchase, property management companies often require renovation units to have a certain coverage amount. While the management corporation may purchase third-party insurance, it typically only covers accidents that occur in common areas of the building. Any accidents within the renovation unit are not covered. To mitigate the risk of bearing a large compensation burden in the event of an accident, DECOLAND strongly recommends homeowners to purchase this insurance. You can request to be added as an additional insured under the policy that the renovation company has already purchased. Typically, this is slightly cheaper than purchasing separate renovation third-party insurance. However, to avoid any errors or omissions, we recommend homeowners to purchase it separately.
Renovation Project Insurance:
This is also voluntary and mainly covers the homeowner's losses, including damage to materials and personal property within the home due to theft, fire, water damage, or other natural disasters that occur during the renovation. Homeowners need to purchase this insurance before starting the renovation and should set the coverage amount based on the renovation quotation.
Labor Insurance:
Generally, it is the responsibility of the renovation company to purchase labor insurance. As employers, renovation companies are legally required to provide labor insurance for their workers. However, as homeowners are also responsible for any accidents that may occur during the project, it is recommended that homeowners purchase their own insurance. Alternatively, homeowners can request that the renovation company add them to the policy as "project commissioners" or "project owners" to ensure coverage.
Home Insurance vs. Renovation Insurance:
Different home insurance plans offer varying coverage, and some may include coverage for certain renovation-related accidents that occur during the project, such as damage to property. However, insurance companies typically have strict definitions of "renovation," and homeowners should be aware of the terms and conditions of their home insurance policy to avoid surprises in case of an accident. Home insurance's third-party coverage usually includes only household members. If an accident is caused by a renovation worker, the insurance company may not cover it.
Two Cases Where Renovation Insurance Might Not Pay Out:
1. Scaffolding and Exterior Work:
Generally, standard third-party insurance doesn't include scaffolding or exterior work. Homeowners would need to pay additional premiums, typically not exceeding 15-20% of the total project cost, for coverage. Some insurance companies may only cover accidents that occur while using scaffolding, not during its assembly or disassembly.
2. Properties Over 40 Years Old:
Properties older than 30 years often face higher risks, and most insurance products have an age limit. Premiums for homes older than 30 years may be higher, and some insurance companies may require individual assessments. The building type can also affect coverage. For standalone houses or village houses, homeowners should inquire with insurance companies about coverage limits and premiums.
How to Verify if the Renovation Company Has Adequate Insurance:
Before starting the renovation, homeowners should verify whether the renovation company has valid labor insurance and third-party liability insurance. Homeowners should check the policy for the insurance company's name, which should match the construction company's name, the policy's validity period, the number of insured workers, and the nature of their work. Pay particular attention to the "nature of work" section. If the construction company is engaged in scaffolding or related work, the policy will typically indicate "Scaffolding Work." If it only mentions "Clerical Worker," it means the policy only covers the office employees of the company, not construction workers. If homeowners have any doubts about the policy, they can contact the insurance company directly with the consent of the renovation company for clarification.
Now, when you successfully match with a renovation company through DECOLAND, we provide you with third-party liability insurance and labor insurance!
