Accidents can happen at any time. And if they were to happen in your home while construction work is ongoing, you may be held liable. That’s why you should make sure your contractor has workers’ insurance and a surety bond.
Sadler Building Corporation, a top semi custom home builder in the state, elaborates on how insurance and a surety bond can help protect you from legal claims below.
What’s the Difference Between the Two?
Both provide some form of compensation in case something untoward happens. In a sense, the main difference is that homeowners can benefit more from a bond while a contractor stands to gain more from an insurance policy.
Before a contractor can obtain their license, they’ll have to get a license bond. A bond is a contract between three parties: the contractor (the principal), the state licensing agency or board (the obligee) and an insurance company (the surety).
In a sense, the bond is a guarantee that the contractor will finish the project satisfactorily. Otherwise, they’ll have to compensate you, although not directly. Suppose a contractor meets to fail his obligations, the obligee, or in this case the state licensing agency, will first file a claim with the insurance company, who’ll then release the funds for compensation. The contractor will then have to reimburse the insurance company.
If you want to check if a contractor does possess a surety bond, ask for a copy of their license. A license is a prerequisite to obtaining a surety bond. Afterward, ask for a certificate of bonding as well as information about the bonding organization.
What About an Insurance Policy?
Workers’ compensation and liability insurance shield the contractor—and you by extension—from legal claims in case some employees were injured while on the job.
How to Minimize the Risk of Accidents
You can’t completely rule out the possibility of accidents happening. However, there are ways to reduce that risk. One of them is making sure your contractor or custom home builder has enough experience.
Looking for an experienced contractor in your neighborhood?
Sadler Building Corporation, a contractor with more than three decades’ worth of experience, offers professional remodeling services. For inquiries, call us at (757) 273-6798. Or leave us a message on this form. We serve homeowners in Suffolk, VA, as well as other areas in Virginia.