During the construction of your home, home owners insurance will cover most of your risk but you are asked to grab a builders risk policy due to the possibility that a contractor breaks something or they open the roof and a leak sets in -- the good news is you will only pay for the length of the time you're using it. As soon as you close the extra policy you will no longer be charged.
A contractor carries a general liability insurance and workmans comp insurance but a contractor will give you a certificate of additionally insured but a homeowner should get their own insurance during the length of the construction project.
In order for a contractor to pull a permit the building department needs to have all of a contractors paperwork in order otherwise a contractor cannot pull a permit but there's no way for a contractor to know if a homeowner has done their own due diligence.
A bonus item Josh shares are the details regarding a certificate of occupancy that must be processed before you can live in your home regardless of how many other items you have done properly.
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