Contractor Insurance in Maine: What to Verify

Two policies matter: general liability, which covers damage to your property, and workers' compensation, which covers somebody injured on your job. Verify both by having the certificate sent directly from the contractor's insurance agent, with your project address on it, and read the expiration dates.

With no state license to check in Maine, insurance is the most checkable thing about any contractor, and it is the one homeowners skip most often.

I verify insurance on every contractor in my network before anybody gets a name, and I re-check it. That covers general contracting statewide and the builders working around Portland. It is screening rather than a guarantee, and you should still do this yourself before you sign.

Which two policies actually matter?

General liability responds when the contractor damages your property or injures somebody who is not an employee. A dropped beam through your floor, water damage from an open roof, a delivery that takes out your neighbour's fence.

Workers' compensation responds when somebody working on your job is hurt. It pays their medical costs and lost wages, and it is the policy whose absence has the largest potential consequence for you.

There are others that come up on larger projects and they are secondary. Get these two right first.

What does general liability cover?

This is the policy every contractor will tell you they carry, and most do.

It covers third party property damage and bodily injury arising out of their work. Your house, your belongings, your neighbour's property, and visitors to the site.

What it does not cover is the thing homeowners most often assume it does. Liability insurance generally does not pay to redo the contractor's own defective work. Policies commonly exclude damage to the work itself, on the reasoning that insurance is not a warranty on somebody's craftsmanship.

That distinction is worth carrying. If your new deck is built badly, that is a contract and warranty problem, not an insurance claim. If your new deck collapses and damages the house, the resulting damage is where liability coverage engages. Ask about the warranty separately, in the contract, because insurance does not do that job.

Why is workers' compensation the serious one?

If somebody is injured on your property and there is no workers' compensation policy behind them, the question of who pays does not simply disappear. It can end up pointed at you and at your homeowner's policy, and homeowner's policies are not written to absorb a construction injury.

Maine requires employers to carry workers' compensation for their employees. A contractor with a crew should have it, and it should be on the certificate.

This is the coverage worth being least flexible about, because the potential cost of its absence is not proportional to the size of your project. A one day roof job and a six month renovation carry the same kind of exposure the moment somebody comes off a ladder.

What is the sole proprietor exemption?

Here is the part that surprises people, and it is extremely common in Maine.

Sole proprietors with no employees, and some partners and corporate officers, are frequently not required to carry workers' compensation on themselves. That is legal, it is normal, and a large share of the good independent carpenters in this state operate exactly that way.

It also means an injury to that person on your property has no workers' compensation policy behind it. Nothing about that is dishonest, and you should know it before the ladder goes up rather than afterwards.

Ask directly: do you carry workers' compensation, and does it cover you personally as well as anybody you bring. Then decide. Some homeowners are comfortable with an uninsured solo carpenter on a small job and not on a roof, and that is a reasonable place to land.

If they bring a helper, the calculation changes, and that is worth asking about too.

What is a certificate of insurance?

A certificate is a one page summary of coverage that existed on the day it was issued. It is evidence of insurance, not the policy itself, and it does not obligate the insurer to anything.

That sounds like a caveat and it is genuinely useful anyway. It confirms real policies existed with a real carrier on a real date, which is more than a verbal assurance does.

The limitation is the date. A certificate from four months ago tells you about four months ago, and policies lapse when a business gets tight, which is exactly when you would want it not to.

Why ask the agent and not the contractor?

This is the single most useful sentence on this page.

Ask for the certificate to be sent directly from the contractor's insurance agent or broker to you, naming you and your project address. Do not accept a photograph, a forwarded PDF, or a policy number read out over the phone.

Three reasons. A document that comes from the agent has not been edited. The agent issues it as of today rather than as of whenever the contractor last had one. And requesting it takes an honest contractor one email, so the friction you meet is itself the test.

Contractors do this constantly. It is routine, it is free, and nobody carrying real coverage finds it an imposition.

How do you read the certificate?

Four things, and it takes two minutes.

The named insured should match the business name on your contract exactly. A certificate for a differently named entity is not evidence about the company you are hiring.

The dates. Effective and expiration. If the policy expires during your project, ask what happens then, and consider asking for an updated certificate at renewal.

The coverage lines. General liability and workers' compensation should both be present. A certificate showing only commercial auto and general liability is telling you something by omission.

The certificate holder, which should be you, at your project address. That is what makes it current and specific rather than a general copy.

Ask what the liability limits are and whether they are sensible against the value of your project. A limit that would not cover rebuilding what is being worked on is worth a conversation before work starts.

Should you ask to be additional insured?

You can ask to be named as an additional insured on the contractor's general liability policy for your project. Some contractors do it as a matter of course, and the agent handles it.

On a large project it is a reasonable request. On a small repair it is usually more process than the job warrants, and some policies charge for it.

Ask your own insurance agent whether they recommend it for your specific project. They have no interest in the outcome and they will give you a straight answer, which is more than most sources on this topic will.

What about your own homeowner's policy?

Call your agent before a substantial project starts. This is the step almost nobody takes and it is a free phone call.

Homeowner's policies vary in how they treat a house under major renovation, and some limit or exclude coverage during construction, particularly where the home is unoccupied or the structure is open. Finding that out in advance is straightforward. Finding it out after a fire is not.

Ask three things: does my coverage change during the work, is my dwelling limit still adequate given what I am adding, and do I need anything additional. Your agent will tell you in five minutes.

When do you need builder's risk?

Builder's risk covers the structure while it is being built, against things like fire, theft and weather damage during construction.

On a new build or a major addition it usually matters. Who buys it depends on the contract, and it is a normal thing to work out during negotiation rather than a sign anybody expects trouble.

Read your contract for who carries it and what it covers, and if the project is large enough that this is a live question, ask your own agent rather than relying on the answer from the person selling you the job.

Do subcontractors carry their own?

Your general contractor's policy does not automatically extend to every sub on your site, and this is where a gap can hide.

A good general contractor collects certificates from their subs and keeps them current, because their own insurer requires it. Asking whether they do is a fair question and the answer tells you how the business is run.

The plumbers and electricians are the two you can also verify independently, since both hold real state licenses. On a project of any size it is worth asking who they are, which is question three on the 12 questions to ask before you sign.

What does contractor insurance in Maine not do?

Set expectations honestly, because insurance gets treated as a substitute for diligence and it is not one.

It does not make somebody a good builder. Coverage is a purchase, not a qualification.

It does not warranty the work. That is your contract, and a warranty statement is required in a written Maine home construction contract.

It does not mean they will finish. Insurance and solvency are unrelated, and an abandoned job is not an insurance claim. That situation is covered on an abandoned job is not a claim.

It does not guarantee your claim gets paid. Policies have exclusions, and the one about damage to the contractor's own work catches people.

Insurance is one of four checks worth making, alongside references, financial signals and finished work you have stood in front of.

Frequently asked questions

Is contractor insurance required in Maine? Workers' compensation is required for employers with employees. General liability is not required by the state for general contractors, and it is standard practice, and its absence on a job of any size should end the conversation.

What if my contractor is a one person operation with no coverage? Common and legal in this state. Ask directly what they carry, get any general liability certificate from the agent, and weigh the risk against the job. Many homeowners accept it on small work and not on anything at height.

Can I just look at a photo of the certificate? You can, and it tells you much less. A photo shows a document from an unknown date that you cannot confirm is unedited. The agent sends the real thing for free.

Does the certificate mean I am covered? No. It means the contractor had coverage on the issue date. You are not a party to their policy unless you are named as an additional insured, and even then the policy terms govern.

What happens if a worker is hurt at my house? Report it to your own insurer promptly and get the contractor's insurance details in writing. Where there is any question about coverage, talk to a Maine attorney. This page is general information rather than legal or insurance advice.

Should I ask for a copy of the actual policy? Rarely necessary and rarely given, since policies are long and contain the insurer's proprietary terms. A current certificate from the agent, plus the limits, is what the trade normally provides and is normally enough.

What do I check, and what should you?

Insurance is one of the four things my screening covers before a contractor joins my network, along with references, financial stability and finished work. I re-check them after.

It is screening, not a warranty. Policies lapse between checks, and I would rather tell you that plainly than let you assume otherwise. Ask for a current certificate from the agent for your own project regardless of who introduced you.

Tell me what the project is and where in Maine you are, and three names come back.

More on hiring: how to hire a contractor in Maine · why there is no builder's license here