Licensed and Bonded, What is That?

If you have called for the services of a plumber or carpenters for home renovation, you definitely have availed of insurance and bonded coverage from your service provider or contractor. Bonded is different from insurance and the two are different types of coverage. Contractors have to gain certification process in order to gain that license. License bond and liability coverage are secured mostly by contractors like plumbers. These are systems that protect the contractor from financial losses. However, the two terms are different and you should know the definition of the two terms. 

Licensed

A license is a tangible thing certifying that a person can conduct business legally. A certification may be valid only in his state and must secure again if he or she plans to go into business in another state. To assured customers that the person is a qualified tradesman, testing and certification are required. It is thru this license that assures clients that they will be given the quality service they need and expected according to a code of ethics. The agency or service provider that customers hired are expecting that the compensation of the workers are in accordance of the compensation laws and that the service provider carries the liability insurance. 

Bonded

Bonded means that the certain job is protected. This protects the client can have compensation if the work expected to be finished was not able to finished or there are certain problems encountered along the way on the side of the service provider that could hinder work. So if a contractor leaves without finishing the project, the client can claim compensation for the damages, unfinished work and the like. Damages can also be claimed by clients like when a theft happened and was made by a contractor or sub- contractor hired by the main contractor. Therefore, the client will be compensated for the job unfinished and will have to look for new service providers who would be able to complete the job. 

Liability insurance as well is a way for client protection. However, this kind of protection is not specific. This can be applied in every job as possible and provides employees and materials protection. For instance that an electrician working on your building accidentally damages the wiring of the next building, the insurance provider of the electrician will pay the neighboring building because the electrician is insured of any liabilities and damages done. 

For public works, most cities and municipalities assure first that the contractors they are hiring are bonded. Accidents are very common in the workplace and no matter how strict and safe you are in giving service or doing work, accidents still happen. Therefore, to be protected almost all of the companies or service providers are insured. Companies have to make it a habit of constantly reminding all employees to get their license bond individually for the period covering their stay in the company. Criminal background check is one of the requirements in this bonding process and with the presented document; employers select the best employees from those that are not that beneficial to the company.

If you are looking for a service provider who would do a job in your own home, make sure that the company you are hiring is bonded and licensed. Contractor license bond for a Burlington Countyhave different requirements and contract details from those of bond insurance in Camden County. A master plumber bond in New Jersey is held liable to a bond company for plumber in New Jerseybecause a plumber must review his license prior to renewing and part of this is doing it in the bond company of your state who will write your bond application. Every type of business has different Business Owner’s Policy or for those who are giving public works like the BOP in Gloucester, it is definitely a smart move to protect your business and your business assets.