Is my bad contractor bonded and insured?

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When hiring your contractor, verifying whether he is licensed in your state and that the license is valid is probably your first concern, as well it should be. In some states, a contractor must also be bonded (also called a surety bond), which is an additional measure of insurance that protects the homeowner from unpredictable behaviour of a bad contractor. But too often, a bad contractor will not be bonded. So what are the implications of a bad contractor who is not bonded?

First, understand what your state’s laws are regarding contractor bonds. In most states, purchasing a bond is required along with licensure. However, contractor bonds may not be required if you live in the following states: Nebraska, Rhode Island, Maine, Kentucky, Vermont, and West Virginia. Other states may require a bond depending on which county you reside in; these states include Kansas, Mississippi, Montana, Virginia, Connecticut, and Wyoming. A bad contractor will take advantage of more lax laws in certain counties or states by cutting corners on building permits, completing jobs, or supplying necessary materials, all of which could result in damages. You may or may not have known that your contractor isn’t bonded, but you will need to be prepared for certain outcomes.

· Since one of the worst things a bad contractor can do is bail on you without completing the job, not being bonded will expose you to the risk of your job staying unfinished.
· Most often, contractors acquire the building permits themselves at the behest of you, the owner of the property. Therefore, it is your responsibility to make sure that your contractor followed through to get the permit before performing work.
· As it pertains to supplies, remember to have a detailed (or as detailed as possible) contract with the contractor about which supplies he must buy, because a bonded contractor will be covered in the event that necessary materials or supplies are not provided.
· What work do you plan on doing on your house? Some trades, or subcontractors, are required to be bonded themselves in certain states like Washington and Wisconsin. Make sure you vet your subs before hiring them.

Remember—don’t assume that just because your contractor is licensed, that you are covered in the event that your contractor goes rogue.

 

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