Question of Finance: Does my home insurance cover tradespeople?
Q My wife and I were hoping to move house this year -- we bought it three years ago with the intention of trading up in 36 months.
But with negative equity, that's no longer feasible. We have some savings, so we're going to spend some money renovating the house as labour has never been cheaper.
I heard of a case where a builder fell on the job, sued the homeowner who lost their house as a result. Will my home insurance cover people working on my property or do the workmen themselves need their own insurance?
A You should not rely on your own insurance policy. Householders should receive written confirmation that their chosen tradesman holds valid and up-to-date liability insurance.
While there may be a difference of a few hundred euro in the price between an insured and an uninsured tradesman, it could cost tens of thousands more if it goes wrong.
Anecdotal evidence has suggested that a significant percentage of sub-contractors and small tradesmen are choosing not to renew or substantially reduce the level of cover under their business insurance, leaving their customers exposed to huge losses and claims.
While most tradespeople were compliant with insurance requirements during the boom years, cost cutting has affected all businesses and insurance seems to be the easy option.
This has resulted in a situation whereby those using the services of uninsured or underinsured tradespeople could be stung with a huge bill or years of higher insurance premiums on their house insurance due to a claim.
It is the responsibility of any person employing a tradesman to ensure that they have adequate liability insurance cover.
- Brian McNelis, director of general services, Irish Brokers' Association.