The pandemic years have changed life as we know it, and this has led to a shift in priorities for most people. A brilliant example of this is the incredible growth of the home renovation industry, fondly called the “reno boom,” due to the sudden interest of many homeowners to revamp their properties. While this mainly means plenty of opportunities for home renovation contractors in the country, it also highlights the importance of having a comprehensive insurance policy.
In this in-depth article, we cover the following topics:
- Home Renovation Boom in the Time of COVID-19
- Top Reasons Why Contractors Should Have a Home Renovation Insurance
- What Types of Insurance Should Home Renovation Contractors Have?
- How to Make the Most of the “Reno Boom”
Let’s get started!
Home Renovation Boom in the Time of COVID-19
Both millennials and baby boomers have become more interested in renovating their properties in recent years.
Most homeowners now want a multifunctional home with added amenities, which makes perfect sense after experiencing COVID-19 restrictions where everyone had no other choice but to stay at home.
What used to be just a sanctuary to start and end the day now had to incorporate a functioning office for people who adapted the work-from-home setup, a school and/or daycare for children who couldn’t leave the house, and recreational space for entertainment, hobbies, and fitness activities.
Most home renovations also focused on addressing much-needed repairs, like faulty plumbing or leaky windows, which cannot be ignored anymore because of the amount of time spent in the home.
Top Reasons Why Contractors Should Have a Home Renovation Insurance
Fearing hassle and headaches, diligent property owners would always ask if contractors have home renovation insurance before signing a contract with them. But, on the other hand, it’s a must for home improvement contractors, especially in light of the reno boom, because of the following reasons:
Increased Risks of Injury with More People at Home
As of the writing of this article, not all educational institutions in Canada are open for in-person learning. This means that some students would still be staying at home. Furthermore, many companies still have a work-from-home setup with remote work available indefinitely for some, as 45% of Canadians say they prefer doing it at least three times a week.
In a nutshell, these factors mean that more people will be present while home renovation work is being done. This increases the chances of accidents happening, especially for residents who will pass by the project site out of curiosity or necessity. This becomes even more problematic if young children are roaming around. Poorly placed tools, heavy materials precariously placed on scaffolding, minor demolition work in progress can quickly turn into scenarios of bodily injury that your home renovation business can be liable for.
Therefore, it only makes sense to get comprehensive home renovation insurance as part of your risk management plan. Here at KASE, we recommend our clients in this type of industry get a commercial general liability as a foundation policy to protect their business, employees, and clients.
Staying Ahead of the Competition
According to Statista, the average homeowner is willing to spend around $10,200 on home renovations in the past. But the figures doubled in 2021, with 11% of Canadian homeowners allocating over $25,000 for home updates.
While there’s a wealth of opportunities available for home renovation contractors, the market also becomes more competitive and saturated as new businesses offering the same services emerge. Whether it’s a commercial building or home renovation, most clients are now aware of the importance of hiring only contractors with home renovation insurance. They know for a fact that uninsured contractors are hassles waiting to happen, exposing them to major financial risks should an injury or property damage occur.
No matter how impressive your home renovation portfolio may be, clients will always think twice about hiring you if you don’t have a comprehensive policy to assure them.
Symbol of Contractor Credibility and Quality of Work
Contractors with home renovation insurance are the real deal. It’s because license and insurance are prerequisites of one another. Insured contractors are an excellent indication that they are licensed and highly qualified to do the job. It’s also a sign that they value their reputation. Because they are fully aware that they risk losing their license if they produce something that’s not up to standards.
Higher Workload, Higher Risks of Accidents
Although an increase in demand means increased profits, it can also put a lot of strain on the businesses. For example, there’s the possibility of employees working extensive shifts to meet deadlines or machinery malfunctions after long hours of continuous use. All these things combined can pave the way for a higher likelihood of committing mistakes and falling into accidents, quickly turning into lawsuits that can bring your business to a grinding halt. So again, having home renovation insurance is going to be your best bet in this scenario.
What Types of Insurance Should Home Renovation Contractors Have?
Since there’s a lot at stake for contractors, having comprehensive home renovation insurance is definitely a worthwhile investment. Here are some policies we can put together for your business.
General liability insurance is a must-have for all kinds of businesses, and this goes double for contractors who are involved in high-risk work, specifically if you:
- Work in client homes and other third-party properties
- Operate with high-powered equipment
- Do different tasks in fall hazard areas
- Have project sites near third-party individuals that can get hurt
General liability insurance protects home renovation contractors from potential financial loss from property damage claims, injury claims, and even job completion claims in the event that clients deem your output is subpar or has failed to meet industry standards.
Worker’s Compensation Insurance
Protect your business and your hardworking employees with worker’s compensation insurance. With more projects rolling in and schedules getting tighter during the reno boom, employees are more likely to make mistakes that can lead to getting ill or becoming injured while on the job. The worker’s compensation insurance will cover medical expenses, ongoing care expenses, lost wages, and disability benefits. This coverage would also provide funeral expenses if an employee, unfortunately, loses their life while at work or due to an injury sustained on the job.
Mistakes that could lead to property damage while working or after completion can cost you thousands of dollars in repairs, redos, or worse, legal defence in the event that the client becomes too upset and sues you for negligence. Errors and omissions insurance protects you from potential liability lawsuits due to an error in judgment or an omission. This insurance is also known as “professional liability insurance.” In some regions, and for certain professions, it is required by law.
Commercial Auto Insurance
If your business owns a commercial car or operates a fleet of vehicles, you should also have commercial auto insurance. Reno boom or not, road accidents can happen at any time, leading to injuries and property damage. Commercial auto insurance protects you by covering the necessary medical fees, repair/replacement fees, and legal fees.
Tools and Equipment Insurance
As a home renovation contractor, your business relies on tools and equipment. You can insure these valuable assets in case they are stolen, lost, or damaged. Tools and equipment insurance can be personalized to cover owned, borrowed, leased, and rented equipment.
Make the Most of The Reno Boom with a Comprehensive Contractors Insurance
Assure potential clients that you are a reputable and reliable contractor with all-inclusive home renovation insurance.
Sign up for an insurance plan that is personalized to the unique needs of your business with comprehensive coverage in a cost-effective bundle. This is what we, at KASE Insurance, specialize in. We will start with a thorough assessment of the specific risks to your business. From there, we will customize a comprehensive insurance plan that takes into account your business’s needs and preferences. By getting rid of costly unnecessary riders, our insurance experts can help you save in the long run while still having complete coverage.
Furthermore, our insurance champions will be with you every step of the way, from negotiating premiums to filing claims. Get the added peace of mind today through our tailor-fit home renovation insurance. Focus on getting the most out of the reno boom without worries, knowing that KASE Insurance has got you covered.