Working with Professionals – An Insurance Perspective

By: Mike Mullen, Executive Director of Property Management, Hamilton
From the WB Condo Connection, Volume 8, Issue 4
By: Mike Mullen, Executive Director of Property Management, Hamilton
Everyone in the condominium industry is familiar with the term “cheaper is not always better”; however, sometimes cheaper can also be much more expensive in the long run, especially in terms of condominium insurance.
If a major loss was to occur due to the negligence of a contractor, the corporation’s insurance policy could be called upon to provide coverage; however, depending on the contractor’s licensing and insurance, doing so could have a major effect on the insurance policy for the corporation.

Ensure the contractor is licensed and insured

If a contractor is properly licensed and insured, the corporation’s insurance company could go after (subrogate against) the insurance company of the contractor and try to recover costs. If successful, this would have less of an effect on the insurance policy for the corporation. If the contractor was not properly licensed and insured, the corporation’s insurance company could not subrogate against the contractor’s insurance company; and therefore, the entire cost would be borne by the condominium insurance policy. This would result in a claim against the policy and possibly increased premiums down the road.
This is definitely something condominium corporations should consider when choosing contractors. Ensure the contractor is licensed and insured to reduce the likelihood that losses such as this do not occur down the road.