The construction process doesn’t always end once the house, building, or renovation is complete. In some cases, the contracting company that worked on the project keeps an eye on things, ready to jump in and remedy any construction-based issues within a certain time frame. Rather than simply make this promise in writing, the contractor takes out a maintenance bond, keeping it in place for the duration of the warranty period. This proves to the home or building owner that the contractor is serious about the long-term success of the project.
But what does a maintenance bond cover? Here’s what you need to know.
Taking Out a Maintenance Bond
The process of obtaining a maintenance bond is similar to that of other construction bonds. The contractor will need to go to a surety company that specializes in various types of construction bonds. There, they apply for the bond and go through all of the requirements to prove that they have the money in place should the bond need to be called in.
Then, they obtain the bond, which is for a specific amount of time called the warranty period. The homeowner or owner of the building project is a part of this as well, as they are the obligee of the bond. If the principal holder, also known as the contractor, fails to follow through with the warranty promise, the obligee can call in the bond and be compensated for whatever expenses they’ll need to deal with in order to fix the issues.
What a Maintenance Bond Covers
A maintenance bond is designed to warranty the work completed by the contractor and their associates. This falls into three different categories:
Problems With Materials – If the contractor accidentally used defective materials to build the house, building, or complete the renovation project, then they’ll have to be replaced. For example, this can include faulty wiring, issues with plumbing supplies, appliances included in the scope of the job like the refrigerator or stove, cracked drywall, paint that peels off of the walls, and more. Anything caused by faulty materials will need to be redone.
Issues With the Construction Work – Construction work that’s done quickly and by people who aren’t complete experts on the job at hand can make mistakes, leading to walls that aren’t plumb, uneven floorboards, and more. These also fall under the purview of a maintenance bond.
Design Problems – This falls on the architect who was consulted on the project, although it’s under the scope of the contractor due to the fact that they hired that person. If something in the house or building ends up being poorly designed, like a sharp corner or similar issue, it will need to be rectified to satisfy the homeowner.
Have Questions? Contact Charlotte Insurance
Want to learn more about how maintenance bonds work? Think that your construction company would benefit from taking one out? Contact Charlotte Insurance. Our knowledgeable agents can explore and explain all available options and put together the insurance coverage plan your business needs.