Property owners hire many types of contractors (e.g., custodians, snow removers, repairmen), and their actions or negligence may cause accidents. Injured parties will likely sue property owners and the contractors. Thus, owners should insist that contractor agreements contain insurance and indemnification provisions.

Owners should insist that before work begins, they receive evidence that contractors purchased adequate insurance coverage. It should cover relevant risks (e.g., physical injuries, property damage) and have sufficiently high limits to cover the cost of defending lawsuits and paying damage awards. Typically, contractors agree to carry general liability insurance and workers’ compensation insurance.

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