Why you should use a licensed, insured and bonded contractor?

Architectural Review Committee’s (ARC’s) of Home Owner Associations (HOA’s) and Condominium Associations (COA’s) generally require every ARC request submitted involving the use of a contractor to provide evidence of a State License, a Certificate of General Liability, Workman’s Compensation coverage and evidence of a Surety Bond for each project.  The Certificate(s) are required to list the home owner and the HOA or COA as either a Named Additional Insured or a Certificate Holder. Liability insurance covers property and injuries caused by the contractor’s work and Workman’s Compensation provides payment to injured workers, without regard to who was at fault in the accident, for lost wages and medical expenses. Without these types of insurance, consumers could pay out of their own pocket if the homeowner’s insurance policy is insufficient to cover the resulting injury cost and bills.

Why should you have this and what is the difference in the two designations?

The best answer is for your protection.  This Named Additional Insured Certificate protects the homeowner and the HOA or COA from liability claims and Workman’s comp claims. The difference in a Certification listing you as a Named Additional Insured allows for you to share in the monies which the insurance company may pay to a contractor in the event of a claim and a Certificate Holder is only provided notification by the insurer in the event the contractor allows the policy to lapse. A significant difference.  Whenever possible you should request to be listed as a Named Additional Insured. It is like having an additional insurance policy with your homeowner’s policy. If your contractor is injured or injures you or someone else you will appreciate the fact that you took the time to acquire this coverage. Either way you both should have insurance to avoid a contractor liability nightmare!

Still Confused?

If you are confused about when and if a contractor you hire needs to hold a license, you’re not alone.  Most states require licensing for most trades and handymen (but, not all handymen).   There are many limitations as to what a Handyman can and cannot do as they may not be properly licensed and may not carry the appropriate insurance to protect you the home owner or the HOA or COA.  In the State of Florida you can verify a contractor’s license status by searching www.sunbiz.org for your contracter by legal entity name.

Florida’s statues do provide an exception for “basic handyman services.”  There is no limit to the contract amount, but it does limit the types of services a handyman can provide.  Here is a list of things that a Handyman cannot do:

  1. Foundations
  2. Structural Walls
  3. Plumbing
  4. Electrical
  5. Painting
  6. Asbestos abatement
  7. Mold remediation
  8. And, other tasks that require licenses

Check the Personal Liability Section of your homeowner’s policy for specifics regarding injury on your property.  Look at the personal liability section for the details of coverage.  Major injuries aren’t usually well covered and limits are usually fairly low. Do not rely upon your umbrella policy to protect you if a contractor’s employee sustains major injury.  Make sure the insurance covers:

  • Any bodily injury or property damage the firm accidentally causes to you, your family, and your property.
  • Workman’s compensation for injuries contractors cause to themselves or their employees.
  • Accidents involving the contractor’s own equipment, such as falling off a ladder.

Will you pay more for services provided by a properly licensed, insured and bonded contractor?  Most likely, but the risk and liability that is mitigated is well worth the additional cost.  


Carefree Home Watch (Carefree) provides Concierge Services that include suggestions for properly licensed and insured contractors that can be used for your projects.   We strongly recommend you conduct your own due diligence and evaluate the documents provided by any contractor to make a well-informed decision to protect yourself.  Carefree provides professional home watch services for home owners, condominium owners and owners of investment properties in SWFL.  Call Carefree at 239-234-1847 or email us at info@carefreehomewatch.com or visit our website at www.carefreehomewatch.com for a FREE evaluation of your home watch requirements.  We provide, “Exceptional care while you’re not there.”™

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