Your builder will have to fulfill a different set of responsibilities to uphold their side of the contract. First your contractor must possess the necessary licenses to perform the work you are hiring them for. Each state operates somewhat differently but in most cases this requires them to pass a proficiency exam and maintain a certain level of continuing education credits each year. They must also keep a clean record and work within the guidelines of the law or risk the suspension or termination of their contractor’s license. Contractors are also legally required to maintain liability insurance and workman’s compensation insurance. These types of insurance are very important as they will protect you from assuming liability if your home is damaged or a worker is injured during your project. Your contractor will be required to obtain a building permit and pass all necessary inspections to verify compliance with IRC codes and assume the responsibility for having utility lines located before excavating frost footings. In addition to these prerequisite responsibilities your contractor also agrees to complete the project in a professional manner for the agreed upon price and within the stated time frame.