Recent legislation to license homebuilders in the state of Georgia is a fantastic benefit to home purchasers of all price ranges. The long-term quality of home construction will be the greatest benefit. All builders will be held accountable for their product by having to answer to a government entity. Much of the success of the program however, will depend on the good judgment of the home purchaser. Selecting a state licensed professional builder who has the proper insurance (liability, workers compensation) will be a great first step.
Local Home Builder Associations help Builders through networking opportunities with other builders and serves as a catalyst for builders to access training and CEU credits to maintain licensure. The most up-to-date information on the building industry can be obtained through local, state and National affiliations.
There are 5 basic parts to GL:
- Premises Operations: Covers the immediate act of doing work & the location where work is being performed.
- Products and Completed Operations: Covers damages arising in and out of faulty products or workmanship.
- Rented Premises: Cover’s insured’s rented property in their care custody and control.
- Personal and Advertising Injury: Covers liable, slander, and false arrest.
- Medical Payments: Pays for injuries regardless of fault.
An all risk policy which covers the dwelling and materials while the dwelling is under construction. The premium based on the value of the finished structure, excluding cost of land and is usually a fully earned annual premium. (meaning you have 12 months to complete the project and if you finish it in 6 months, your premium is not refundable on a pro-rata basis. In some cases when the project takes longer than one year, some companies will renew it on a monthly earned basis, at the same rate.) Coverage ceases to exist once the dwelling is occupied, at which time the consumer would purchase a Homeowners policy. (this is done prior to closing and usually the premium is billed in escrow or the home owner may pay it monthly. Consumers should be aware that some builders risk policies exclude theft coverage until the structure can be secured. There are also broader policies that offer theft coverage from day one.
There are two parts to WC*:
- Employers Liability Section: Covers the employer in the instance when he/she is negligent and is sued by their employee.
- Indemnity Section: Covers the injured worker/employee for any medical bills, rehabilitation, medicine, loss of income, etc.
As a consumer, if you hire an uninsured Builder or contractor, you are not only sacrificing the quality of the product, but you are ultimately assuming 100% of all these risks or exposures. Even a small claim could result in the depletion of your assets that you have worked your entire life to accumulate. You could even have your future wages garnished.
*Note: State Law does not require WC for businesses with 3 or less employees.
*Information provided by:
Craig Chalkley – Chalkley Custom Homes &
Amanda Roland – Reeves & Roland and Abbott Insurance