Page 24 - What You Need to Know to Find the Right Builder

permit at the same time as the other permits. Just ask your builder to verify

that this is the case.
• Official Address. This is also a very good time to begin work on identifying
your "official" or emergency 911 address. If you are in a rural area you may
need to name your private road. Alert your local post office or emergency
agency to receive appropriate numbering and signage.
• Insurances. It’s important that you ask your builder for proof of insurances.

1. If a builder is putting on an addition to an existing home, general
liability insurance covers any damage that they may cause to the
existing structure. Make sure the amount of the policy is sufficient to
cover the replacement cost of the home and all its contents.
Typically, it should have a value of at least $1 million. General
Liability does not cover any new construction that is being done. For

example, if the builder is responsible for a fire that breaks out during
construction, and the entire home is destroyed, general liability will
cover the replacement of the existing structure but not the addition
that is in the process of being built.
2. To protect a new home or addition during construction, your builder
must purchase a builder’s risk policy. This typically costs a few
thousand dollars and is only good for the specific project that it is
issued for. A builder’s risk policy will cover the cost of a project
during construction as well as theft of materials from the jobsite.

Don’t be surprised to see this fee included in your proposal.
3. I can’t stress this one enough! Be sure that your builder also has a
valid workers compensation policy in place valued at a minimum of
$500,000 per occurrence for their carpenters. It’s a common practice
in Maine and New Hampshire for a builder to call the carpenters
“subcontractors” as a means of avoiding the expense of workers

compensation insurance and taxes. However, if an injury was to
occur on your project both the builder and the client/homeowner
would be vulnerable to a lawsuit. Your homeowner’s insurance
policy will not cover any injuries that occur during construction.

The following items should all be handled by your builder, but we’ve listed them
here for you to have a little background knowledge of how a basic home building
timeline should proceed. Of course, every home is different, and every builder will

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