Licensed, Bonded, and Insured: Why It Really Matters?

If you hire a contractor for a business or personal project, make sure they have a license, a bond, and are insured. Everyone who owns a home, runs a business, or works as a contractor needs to do this. These factors make sure everything is alright, and this saves enough money in case something goes wrong. If you don’t have Licensed, Bonded, and Insured, there are chances that poor performance could cause costs to increase or legal issues. Check the license, bond, and insurance of your contractor. A lot of things that protect people have an impact on the project, the service. Keep these things in mind when you are in charge of a building project, getting business insurance, or hiring a service provider.

In this blog, we are going to talk about what is licensed, bonded, and insured, and how getting the right insurance, like general liability insurance, helps stay secure.

What is Licensed, Bonded, and Insured?

Before hiring anyone for your home or business project, it’s important to understand what licensed, bonded, and insured.
Here’s a brief breakdown of each term:

Licensed: To get a license, you have to do what the state or local government declares and pass tests. The person who is licensed must have the skills, knowledge, and experience to do work that meets the standards of the industry. The government has given its approval to the contractor’s level of skill.

Bonded: A contractor is bonded when they buy a surety bond from a bonding company. If the contractor breaks the law or doesn’t finish the job as promised, this bond will keep your money safe. Even if the contractor doesn’t do their part, you will still get paid for any work that is done poorly or not at all. It makes sure that the contractor keeps their word.

Insured: Insurance is protection against Theft, accidents, and property damage. You won’t have to deal with these issues if you have insurance. You need to be able to keep your money safe in case the project doesn’t work out. General liability insurance will pay for your costs if someone gets damaged or if something breaks at work

The Importance of Being Licensed, Bonded, and Insured

Here’s why this combination of qualifications is so important:
1. Legal Compliance and Quality Assurance: Anyone who is licensed to do work in your area will definitely follow all the laws and rules. It doesn’t matter what kind of work it is—building, plumbing, or electricity. It is safe and right for a licensed contractor. HomeAdvisor declares that 58% of homeowners have had problems with contractors who don’t have the right insurance or licenses. This meant that they would either have to pay extra money to fix the damage or go to court.

2. Financial Protection: As long as they are bonded, the contractor is required to abide by the terms of the agreement. If they fail to fulfil the commitments, the bonding company will protect your money. A bond can help you recoup the cost of hiring a new contractor to complete the job if the first one files for bankruptcy.

3. Risk Management and Liability Coverage: If something goes wrong, someone is injured, or if the contractor is insured during the project, you will both be covered. You might be held liable if someone is injured on your property if you are not insured. Your general liability insurance will cover the cost of repairs if a contractor injures themselves or causes damage to your property.

4. Added Assurance and Protection: A contractor who has a license, bond, and insurance should be fully qualified, responsible, and not take risks. Extra costs or work that isn’t necessary are incurred if you meet these requirements. There is no doubt that the contractor will meet the standards of the job and finish it on time.

The Difference Between Licensed, Bonded, and Insured

Why Hire a Licensed, Bonded, and Insured Contractor?

Here’s why it’s important to hire a contractor who is licensed, bonded, and insured:

Avoiding Risk and Liability: This avoids the contractor damaging your property, not finishing the job, or having an accident while they are working. 39% of contractors surveyed in 2023 said they believe they can safely finish projects if they have insurance and a bond.

Quality Assurance: A licensed contractor has proven they can complete the job well. Insurance and bonds also make sure that you can fix the problem without having to pay for it if something goes wrong during the project.

Legal Protection:  A licensed contractor promises to really follow all the rules and laws in the area. If you don’t have the right license, you get a fine, have to wait longer, or even build in a way that isn’t secure. In the meantime, general liability insurance will keep you from having to pay for damage that happens at work.

What Happens if a Contractor is Not Licensed or Insured?

Hiring a Contractor who lacks insurance, a bond, or a license is a major risk. The contractor does not have a license, so you cannot be sure that their work will follow the rules in your area or the industry. The builder may charge you more if they mess up or don’t finish the job. If someone gets injured or something gets damaged on your property and you don’t have insurance, you will be responsible.  You might lose money or get in trouble with the law.

Benefits of Bonded and Insured Services

The main benefit of hiring a bonded and insured contractor is that it gives you a sense of security.  Establishing these safety guidelines ensures that the work is completed correctly and professionally. There will be more irregular issues, and your project will run more smoothly and be simpler. If something goes wrong with the project or the contractor doesn’t fulfil their end of the bargain, you may also take the matter to court.

Why Insure Your Company is Your Trusted Partner

When you hire contractors, it’s important to know what a license, bond, and insurance mean. Before you hire a contractor, you should know what a license, bond, and insurance stand for. You will be safe from threat records. They make sure your project is done in the safest and most legal way possible.  Ensure your Company has the best options for people and businesses that want reliable protection through General Liability Insurance and other important policies. At Insure Your Company, we offer full insurance plans that are made just for your safety. We can help you protect your business or property in general, get small business insurance, or get life insurance for a key person. You can protect your investment and make sure your projects are successful by hiring professionals who are licensed, insured, and bonded.

Stay protected with Insure Your Company—contact us today to get your insurance!

1. What does it mean to hire a licensed, bonded, and insured contractor?
If a contractor is licensed, bonded, and insured, you can be sure that they will do good work, keep you safe, and give you good value for your money.

2. Why should I hire a licensed, bonded, and insured contractor?
If you hire a licensed, bonded, and insured contractor from Insure Your Company, you won’t have to worry about accidents, damage, lost profits, or running into legal trouble.

3. What happens if a contractor isn’t licensed, bonded, or insured?
If these don’t protect you, you might have to pay for any harm, repairs, or charges in court.

4. Why is General Liability Insurance important for contractors?
Get general liability insurance. Ensure your company offers insurance against claims for workplace accidents, property damage, and injuries to keep you from being held responsible.

5. How can Insure Your Company help with contractor insurance?
General Liability Insurance is one of the specialized contractor insurance options that Insure Your Company offers to protect your project from unexpected risks.

Dan Levenson

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