Posted on May 7 2013
Are you protected?
We all know that each construction company should and must have an insurance to protect your home.
It is time for you to remodel your home. Wether it is a bathroom remodeling in Los Angeles or kitchen remodeling in Los Angeles or room addition, renovation or any construction work that you would like to do.
What kind of insurances and what does it means?
Liability insurance will protect contractors, home builders and remodelers against injuries, accidents or property damage suffer on the job. While working on construction projects, workers can accidentally damage a property mishandling materials and tools, or while remodeling process is under way.
Common business standards require you to provide evidence of construction liability insurance before repairing or remodeling homes. Sub contractors also are required to present their evidence before entering or starting their participation in a construction job.
This insurance is essential on the home building business, because sometimes homeowners may want to sue contractors for damages occur during the construction process. Or in the event of injury, workers may want to file litigation against the homeowner or contractor. Having good construction liability insurance protects builders from lawsuits or when they suffer loss from unexpected conditions.
A surety bond is not an insurance policy.
A surety bond is a guarantee, in which the surety guarantees that the contractor, called the “principal” in the bond, will perform the “obligation” stated in the bond. For example, the “obligation” stated in a bid bond is that the principal will honor its bid; the “obligation” in a performance bond is that the principal will complete the project; and the “obligation” in a payment bond is that the principal will properly pay subcontractors and suppliers. Bonds frequently state, as a “condition,” that if the principal fully performs the stated obligation, then the bond is void; otherwise the bond remains in full force and effect.
If the principal fails to perform the obligation stated in the bond, both the principal and the surety are liable on the bond, and their liability is “joint and several.” That is, either the principal or surety or both may be sued on the bond, and the entire liability may be collected from either the principal or the surety.
The amount in which a bond is issued is the “penal sum,” or the “penalty amount,” of the bond. Except in a very limited set of circumstances, the penal sum or penalty amount is the upward limit of liability on the bond.
The person or firm to whom the principal and surety owe their obligation is called the “obligee.” On bid bonds, performance bonds, and payment bonds, the obligee is usually the owner. Where a subcontractor furnishes a bond, however, the obligee may be the owner or the general contractor or both.
The people or firms who are entitled to sue on a bond, sometimes called “beneficiaries” of the bond, are usually defined in the language of the bond or in those state and federal statutes that require bonds on public projects.
Workers’ compensation laws protect people who are injured on the job. They are designed to ensure that employees who are injured or disabled on the job are provided with fixed monetary awards, eliminating the need for litigation. These laws also provide benefits for dependents of those workers who are killed because of work-related accidents or illnesses.
Some laws also protect employers and fellow workers by limiting the amount an injured employee can recover from an employer and by eliminating the liability of co-workers in most accidents. State statutes establish this framework for most employment. Federal statutes are limited to federal employees or those workers employed in some significant aspect of interstate commerce.
The Federal Employment Compensation Act provides workers’ compensation for non-military, federal employees. Many of its provisions are typical of most workers’ compensation laws. Awards are limited to “disability or death” sustained while in the performance of the employee’s duties but not caused willfully by the employee or by intoxication. The act covers medical expenses due to the disability and may require the employee to undergo job retraining. A disabled employee receives two-thirds of his or her normal monthly salary during the disability and may receive more for permanent physical injuries or if he or she has dependents. The act provides compensation for survivors of employees who are killed. The act is administered by the Office of Workers’ Compensation Programs.
Is it worth taking the risk?
We hope that this information will help you understand the risk of hiring an unlicensed contractor or hiring a license contractor who has no proper insurances.