You’ve wanted to renovate your cramped, outdated kitchen for ages. Or perhaps you are deciding between staying in your home after major damages or selling and walking away from some potential pricey repairs. Like many, asking around among friends and co-workers may initially help find and hire a contractor, but making sure your contractor is insured in North Carolina is of vital importance.
Things can get ugly – and appallingly expensive – if your contractor isn’t insured. If things don’t go perfectly, you can land in a world of drawn out disputes, expensive fixes you have to foot the bill for, and far more stress than you initially bargained for. You can avoid such a situation, however, by making sure your contractor is reputable and fully insured.
Difference Between Bonding and Insurance
Most reputable contractors advertise themselves as “bonded and insured.” But what, exactly, does that mean—and why does it matter when hiring a contractor in North Carolina?
What Is a Surety Bond?
A surety bond acts as a financial guarantee that the contractor will fulfill their obligations under the contract. If a bonded contractor in North Carolina fails to complete the work or delivers substandard results, the bond protects you, the homeowner. Instead of tapping into your savings or filing a claim with your homeowner’s insurance, the bond ensures that you’re compensated for the losses or that the work will be corrected by another qualified party.
This added protection makes bonded contractors a safer bet, especially for high-value or long-term renovation projects.
What Does Contractor’s Insurance Cover?
While bonding covers incomplete or poor workmanship, a contractor’s insurance policy protects you from physical damages and personal liability. If your property is damaged during the job—or if someone is injured on-site—you won’t be left with the bill.
For example, if a contractor accidentally breaks a water pipe and causes flooding, their general liability insurance would cover the cost of repairs. Similarly, if an employee suffers an injury, worker’s compensation insurance ensures that medical bills and lost wages are covered, protecting you from potential lawsuits.
What Kind/How Much Insurance?
Hiring an insured contractor in North Carolina isn’t enough—you also need to make sure they carry adequate and appropriate coverage.
Ask the contractor for policy documentation, and check that their coverage aligns with the scope of your project. For instance, if you own a luxury home worth over $1 million, the contractor’s insurance should cover a comparable amount in potential damages.
Here are the primary types of contractor insurance to look for:
- General liability insurance – Covers third-party injuries and property damage
- Worker’s compensation – Protects workers in case of job-related injuries
- Property damage coverage – Applies if your home is damaged during construction
Pro tip: Request to be added as an “additional insured” on the contractor’s policy for the duration of your project.
Steps You Need to Take
Before hiring a contractor in North Carolina, take these important steps to verify bonding and insurance and protect yourself from liability:
- Check the contractor’s license and insurance status with your local Better Business Bureau or state licensing board
- Ask for and review recent references
- Schedule a face-to-face meeting to go over project specifics
- Request written proof of insurance and bonding, including policy numbers
- Get everything in writing: scope of work, materials, deadlines, payment schedules, and contingency clauses
Doing your homework upfront can save you thousands later.
How Does Your Contractor Deal With Subcontractors?
Many general contractors rely on subcontractors for specialized work—plumbing, electrical, roofing, etc. However, not all subcontractors are automatically covered under the general contractor’s insurance.
Make sure to ask:
- Are subcontractors covered under the contractor’s policy?
- Are they licensed and insured in North Carolina?
- Are they paid above-board (not under-the-table), with records of employment?
This is a critical area where homeowners often get caught off guard.
Final Thoughts
When hiring a contractor in North Carolina, verifying that they are properly bonded and insured isn’t just a best practice—it’s your financial safeguard. Don’t hesitate to ask questions, do your research, and walk away from anyone unwilling to provide documentation.
Still unsure or overwhelmed by the process? Your local real estate professionals or homeowner associations can often recommend licensed, insured, and bonded contractors with solid reputations in North Carolina.
If you’d like assistance finding a reliable contractor or understanding your options before you start your next project, we’d be happy to help. Reach out today. Contact us