Michigan Residential Builders License Practice Test

What is a residential builder required to provide to maintain compliance?

1. A written contract for every job

2. Annual safety training certifications

3. Evidence of insurance coverage

4. Invoices for all completed work

The correct answer is: Evidence of insurance coverage

A residential builder is required to provide evidence of insurance coverage to maintain compliance. This requirement is crucial because it ensures that the builder has the necessary liability insurance to protect against potential claims arising from accidents or damages that may occur during the construction or renovation process. Insurance coverage is a safeguard for both the builder and the clients, providing financial reassurance that any unforeseen issues can be handled effectively. While written contracts, safety training certifications, and invoices are all important aspects of running a construction business, they do not hold the same compliance significance as demonstrating adequate insurance. Insurance verifies to regulatory bodies and clients that the builder is financially responsible and prepared for liabilities, which is a key aspect of professional practice in the residential construction industry.