The Question of Insurance
Insurance is an important issue when dealing with home improvement projects. Unfortunately, what is covered by insurance is frequently not clear until a problem arises, and then, it may be too late.
On the homeowner side, it is important to make sure that your contractor carries workers' compensation insurance for his employees, or you may be subject to liability if a worker is injured on the job. You must ask for a copy of your contractor's certificate of insurance to make sure he is covered.
You should also call your homeowner's policy and find out if there is anything special you need to do as a result of your improvement project. Ask what kind of scenarios are covered (generally something like water damage from the roof leaking is, but something due to a construction defect is not). Ask your broker if you need premises liability coverage, or if you need to increase the value of your insurance prior to completion of the work.
I know of one contractor who insists that he be listed as a beneficiary to protect himself if something should go wrong during the work.
The time to determine which insurance policies are in place and what kind of coverage is needed is before the job even starts. That way, everyone will be protected and there will be no nasty surprises if something goes awry.