The New York State Department of Insurance is cracking down on a practice they consider very common among companies in New York, specifically contractors, known as Employee Misclassification.

Beginning in April of 2010 (Which is Right Now), all contractors who perform renovation, repair, and/or painting work on homes, apartments and/or child occupied facilities built before 1978 MUST BE CERTIFIED in Lead Safe Work Practices.

Where a Bid Bond ensures the “good faith” of a Contractor’s work-bid, a Performance Bond ensures monetary compensation to the client in the event the Contractor fails to finish the project according to the specifications laid out by the contract (most often due to the default or bankruptcy of the contractor).

Contractors – Bid Bonds provide a guarantee to the Client, they do not release your business from the bid obligation. The contractor will be responsible to repay the Bank or Insurance Carrier any payments made to the Client.

I recently came across a great example in the Insurance Journal of the Business Risk Exclusion included in almost every contractor insurance policy. Often I receive facial expressions of disbelief when I explain this exclusion to new business clients.

Contract (or Construction) Bonds can drive a Contractor crazy, especially if that contractor is dealing with a municipality. However, despite most contractors familiarity with construction bonds,