Decoding Remodeling Contractor Lingo

June 14, 2017

Remodeling Contractor

When hiring a general remodeling contractor, be careful about who you hire. Because the contractor will lead all aspects of the home remodeling; it is important to build a trusting relationship with them.

Trust is the basis for the contractor-contractee relationship. Clear communication is essential. Sometimes though, the industry jargon becomes confusing. Understanding industry terminology is vital. Otherwise, you might end up agreeing to something you don’t want. Here is a short glossary of terms you should know, along with their definitions.


‘Being certified’ means a registered organization approved the contractor. These organizations keep track of all the personnel in the industry. Certifying bodies offer a ‘license’ stating the contractor is ‘certified’ for their jobs. There are two primary contractor certifications.

The National Association of the Remodeling Industry: A contractor with NARI certification possesses an extensive understanding of the industry. It shows that the contractor maintains a high degree of professionalism. The contract must work only in the remodeling industry. This certification requires between two to five years of remodeling experience. All personal have to pass a written exam, which is then reviewed by the NARI certification board.

The International Code Council – This institution dictates that contractors follow certain standards and codes. Contractors must remain in compliance with all the codes. All fifty states and the District of Columbia have adopted these standards at a state or jurisdictional level.


A licensed contractor means that they have a permit to work within a particular area. There are many kinds of licenses – national/federal, state, county or local. Licenses, issued by the government, require the recipient operate within their business jurisdiction. It also proves they have a particular type of insurance or bonding. Usually, a contractor needs a license to receive a permit at the local city hall.


Three major types of insurances your contractors should have when taking on a remodeling project.

Personal Liability – This insurance is for the contractors themselves. It comes handy in case the contractor gets injured at the site. Their insurance covers the expenses incurred.

Worker’s Compensation – This insurance covers the people working for the general contractor. Like Personal Liability, it covers employees under the contractor’s jurisdiction. Make sure that all the subcontractors have both Personal Liability and Workers Compensation insurances.

Property Damage Coverage – This insurance covers all the accidental collateral damage that might happen to your home while the job is still underway.


A bond – also known as the warranty bond, or surety bond – will protect your entire project. Should there be any defects found in the original construction of the home; the warranty bond will guarantees that it be repaired. If any setbacks befall the contractor, or if they are not able to carry out the fix, then the client’s money would be reimbursed.

This is one of the most complicated legalities of the construction business. Consult a lawyer to understand the intricacies of it.


It is always important to know all the aspects of your contractor-contractee relationship before delving into any remodeling project. We hope this short glossary helps you make more sense of the hiring aspect of your project.

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