Canadian Underwriter

Home insurance clients advised to check coverage before renovating

February 1, 2013   by Canadian Underwriter

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Square One Insurance has issued a cautionary note to home and condo owners undertaking renovations, warning them to verify the liability and workers’ compensation coverage of contractors.


In a press release Friday, Vancouver-based Square One noted even small renovations could affect home insurance coverage. It also gives advice in cases where a contractor’s faulty work causes water damage to the policyholder’s home.

“While your policy won’t cover costs to correct faulty design, material or
workmanship, it may cover the water damage caused by the contractor,” Square One stated. “To be as protected as possible, make sure the contractor has proper licenses, solid references and both workers’ compensation and commercial general liability insurance coverage.”

The company also advises comprehensive home policyholders who do their own renovation work to ensure their policies cover damage they accidentally cause to their own homes, belongings or neighbours’ homes.

“For example, if you live in a condo and you’re the one who accidentally puts a screw in a pipe that causes damage to the units beneath you, your personal liability coverage should pay for any resulting damage to your neighbours’ property,” Square One says.

Square One added that most policies require owners to notify their insurance providers of any renovation costing more than $5,000.

“If you fail to do so, you will no longer qualify for the ‘guaranteed building replacement cost’ coverage included in most policies.”

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