Based on what you've said, this certainly seems like the builders fault. Getting them to eat the cost may be difficult depending on how your contract is structured.

Personally I'd be much more concerned about the mold. My understanding is that you can kill surface mold but not mold that has penetrated the surface. E.G., any chemical that can kill mold has particles too large to penetrate wood or other materials to get to the roots. If it's in a place that will no way ever get wet or damp again then you may be OK as it should remain effectively dormant. If it ever does get wet or damp then the roots that weren't killed will begin to grow and you could have some serious problems depending on the type of mold.

Also look in to what chemicals were used and what impacts they may have on your health.

We did an addition years ago and before the new roof area was totally closed off we had a rain. A week or so afterward we had interior ceiling issues in the existing part of the house.

Our contractor came and took a look, then had his guys remove the damaged parts, repair the ceiling, and deal with all the damage.

Our total bill for the remodel was unaffected by this. I agree that if this issue was a mistake by your contractor (or his subs) it should not affect your bill at all.

Do yourself a favor and have a talk with a construction lawyer. It will be worth the several hundred dollars to know how to approach this. My concern would also be continued mold issues plus whatever else he might have done to cut corners. I would also have your own independent inspector come in

'The contractor billed us $2900 for the cleanup and $450 for new insulation and said it falls under miscellaneous expenses. '

That's COMPLETE BS!!!!!!!!!!!!!!! I hope you haven't paid for this!!!!!!!!!!!!! H/SH is trying to make ALLOT of money on 'their' mistake!!!!

Hard to know who's at fault and liable without knowing all the details. Probably builder but could be plenty of blame to go around. Is this an unvented crawlspace? New, vented crawlspaces should be illegal in humid climates. If I had made designer and homeowner aware of problems yet they pushed forward with bad design and scheduling, I would be inclined to bill for the work involved to fix.

The answer to your question depends on the type of contract you have with the builder and what, if any, contract language applies to situations like the one you described.

With a fixed-contract price contract, the builder would typically eat the cost of the rework. If the contract is a cost-plus-guaranteed fee (a.k.a. management-fee contract) contract, the owner is typically responsible for the cost of any waste and rework.

If you have a cost-plus contract, I would hope that your builder would charge you for only those costs incurred to remediate the mold and install the new insulation and waive any builder's fee that might otherwise apply.