The Importance of Contractor Insurance When Building Northern Virginia Additions

Northern Virginia additions involve several stages, from design and planning, through to demolition and construction. All of these aspects come together to create a valuable, comfortable living space, driven by the expertise and professionalism of your Virginia contractor. Protect your property and home improvement investment by hiring an experienced, fully insured contractor.

Two Important Credentials

The United States does not have a national contractor insurance requirement. Standards and requirements for insurance and licensing come in at the state level, and at times even on the county level.

Contractors working in Virginia state need to carry two different types of liability:

• Worker’s Compensation – this protects the employees working on your property. If they become injured or ill during the course of your project, worker’s comp covers medical costs and lost time. This type of insurance protects the employees and limits employer/contractor costs, but it also provides homeowners with some protection against litigation, should an injury occur.
• General Liability – Virginia businesses are required to carry current general liability coverage, which protects the company and clients in the case of accident, theft, and certain types of natural disasters. This type of insurance also protects homeowners from excess costs in these incidents.

What About Bonding?

Some states require contractors to carry bonds or surety bonds. While the two insurance products above cover the company and, in some small part, the client, a surety bond extends that coverage to suppliers and employees and adds emphasis on covering the homeowners against loss and damage.

Bonding is not required in Virginia, although larger home improvement projects, such as Northern Virginia additions, are well served by this type of insurance.

Contractors take out a surety bond in a certain amount, depending on the project total. An insurance or bonding firm holds this coverage for the duration of construction and often for a specified period of time beyond. Homeowners, suppliers and even employees can make a claim against that bond, based on several details and stipulations.

Most claims put in by homeowners involve damage to the property or financial loss. Minor problems, like scheduling delays and changes to the project details, may seem like valid claims, but any claims made must fall within the details of the surety bond.

It is important to note that a surety bond covers the contractor, and is not exclusive to the client. That means all claims made share the same funds. In most cases, homeowners recoup only a portion of the money lost due to damage, etc.

Contractors provide bonding as a sign of good faith and to provide some protection and accountability. Your contractor may not offer bonding as standard practice, but some Virginia contractors provide a bond for specific projects. Ask about the possibility before you make a hiring decision, and be sure each company provides proof of the insurance coverage listed above.

Home additions require a substantial investment and extend over a long period of time. They also involve several different stages of construction. Make sure your Virginia contractor carries worker’s compensation and general liability insurance as a minimum. If bonding presents an advantage to you, ask about the possibility. Insurance provides valuable, vital protection during the construction of Northern Virginia additions.