What does “Bonded and Insured” mean for your business?


Bonds, also called surety bonds, are much like insurance: a contractor pays a premium to a surety company for a specific bond amount, and in return, the surety company is responsible for losses incurred by the contractor. This includes things like: the contractor did not finish the job, did not follow state/federal rules, or did not live up to their end of the contract. A bond helps protect the contractor, as well as ensures that you are reimbursed for any damages or unfinished work.

If you are unsure of a contractor’s legitimacy, ask them for a copy of their license, bond, and/or insurance. This can help you avoid dishonest contractors.


Your company might have a good insurance policy. Even so, you should hire contractors who are independently insured. This goes even more so for jobs that carry a higher risk for personal injury or property damage. In that case, you need a contractor insured against such events. This also applies to theft of contractor materials at a job site.

If you hire someone who is not insured, and they injure themselves or you, your insurance may have to cover the costs, possibly exceeding the limits of your policy.

The next time you’re considering hiring a contractor, remember the importance of finding one bonded, and insured. Whether it’s a small project or a large one, it’s better to be safe than sorry when it comes to your business. Start protecting your assets today by hiring the most qualified people for the job.