Property Damage Caused by Contractor: Who is Responsible?

Hiring a contractor to perform work on a home is something that countless people do each year. Perhaps you’ve always wanted to finish your basement, remodel your kitchen, or install the luxury bathroom you’ve been dreaming of. Whatever it is, when you hire a contractor for work on your home, you have high expectations; the last thing that you anticipate is for the contractor to cause damage to any part of your property. But what if the contractor caused damage to your home? Who is responsible for the damage?

Does Home Insurance Cover Damage Caused by Contractors?

Your homeowners’ insurance company may pay for damages in the following situations:

  • Accident coverage

Accident coverage is part of most homeowners’ insurance policies, and it usually kicks in when a contractor damages a home. Accident coverage will pay for exactly that – damages caused by accidents. This means fires, water damage, structural damages, etc.

  • Property damage

It is important to note that there is a distinction between unsightly or shoddy work and actual damage to property resulting from that work, and that your insurance company will likely only offer coverage for the latter. For example, if a roof is constructed poorly and is beginning to show damage, your homeowners’ insurance company will likely not pay for this damage unless there is resulting damage to the home or structure otherwise. In other words, if there is no damage beyond faulty work, then you probably don’t have a claim for property damage.

  • The damages are within your coverage limits

It is very important to familiarize yourself with your homeowners’ insurance policy before hiring a contractor to perform any work on your home. This is because many homeowners’ policies do cover damages during a home remodel, but don’t cover damages that result from an addition or an individual project. You should know your coverage limits and weigh whether or not increasing them before a project would add peace of mind.

When Does the Contractor’s Insurance Pay?

Even if you file a claim with your homeowners’ insurance company and the company agrees to pay for damages resulting from a contractor’s mistake, it is likely that your insurance company will attempt to collect repayment from the contractor’s insurance.

If your homeowners’ insurance company denies your claim, you may be able to recoup damage from the contractor’s liability insurance. Contractor liability insurance is designed to pay for accidents, damages, and injuries resulting from a contractor’s errors. In some cases, contractors even carry faulty workmanship coverage, which would allow you to recover damages for negligent work, even when other damages aren’t present.

Do Construction Companies Need to Be Insured?

A general contractor licensed to do business in the state where you live must have comprehensive insurance. This means any general contractor that you hire for a home improvement project must carry liability insurance. If you did not confirm that a general contractor has liability insurance before the start of a home improvement project, it might be difficult to claim the company is legally liable for the damage done to your home.

When you screen general contractors, ask each one to show proof of insurance, which includes the policy number for liability insurance and the amount of coverage the company carries. Make sure the coverage exceeds the minimum mandated by state law. If you have any doubts about the insurance coverage of a construction company, contact the local building inspector’s office to get verification.

What Happens if the Construction Company Does Not Carry Insurance?

If the construction company that you hire does not carry liability insurance, the company might be unwilling to pay for the damages out of pocket. You can file a lawsuit against an uninsured general contractor, but the legal process can drag on for months, if not years. You might be able to recover the cost of the damage done to your home through your homeowners’ insurance policy.


Hire a contractor you can trust. Don’t leave any aspect of your home renovation up to chance. You should always make sure a contractor has insurance and read their reviews before you let them work on your home. Taking on a home renovation is an exciting process. Make sure your renovation goes as planned by hiring a contractor with a good track record and the relevant insurance.

Talk to ONYX Insurance Brokers for your insurance needs. We offer the best insurance services that meet your needs. Contact or email us now!




Skip to content