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Whether a plumber or an electrician a small company should always be bonded and insured and here is why .... Bonded or Insured: What's the Difference? 05/ 03/ 2004 by Jeffrey Moses Do you know the difference between something that is bonded and something that is insured? The terms "bonded" and "insured" often are misunderstood. Both involve coverage for financial risk or loss, and in some instances there is little difference between the two. Still, it is important to know the difference when assessing your company's need to protect itself. Bonding usually refers to a type of surety guarantee that a specific project, service or act will be financially covered if performance is not complete or satisfactory. Examples would be projects or services involving construction, home health care, electrical contracting, real estate inspection, gardening services, delivery or moving services. Companies or individuals providing these services and others customarily secure a bond from a bonding company, assuring that if a customer's project is not completed or is not deemed to have been satisfactorily completed, the bonding company will reimburse the customer for financial loss. Some occurrences covered by bonding include noncompletion of a contracted project or service, cost overruns, not meeting schedule, unsatisfactory quality of work, damage to a customer's property while a project is underway or injury to customer's personnel during work. Some customers will not contract work out to companies or individuals that are not bonded. Large companies and government agencies usually require bonding for their contractors, and many service providers secure bonding for themselves to be eligible to compete for large projects. Often, even customers contracting relatively small jobs (such as home repair or gardening services) will not consider companies or individuals that are not bonded. Bonding companies charge according to the type and financial extent of risk. Most bonding companies have packages for certain types of businesses and are competitive in pricing and coverage. Policies vary, however, and it's wise to shop among competing companies. Many companies that provide bonds are insurance companies or insurance agencies. Some specialize in bonding, but that is not a guarantee that they are more experienced or offer better pricing than companies that provide both bonds and insurance. Insurance usually refers to a specific amount of financial coverage for risk to a tangible item, such as a building, car, boat, airplane or shipment of goods. Certain types of insurance, such as errors and omissions (E&O), are more like bonds because they provide financial protection for acts performed or not performed, in contrast to protection for risks to an item. When considering becoming bonded, talk with your bonding company, insurance agent or other financial advisers about any overlap of protection. There's no need to become bonded if you're already adequately covered by insurance. In some cases, it may be cost effective to reduce insurance coverage and become bonded, but decisions such as this can be made only after researching alternatives.

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โˆ™ 2006-09-13 23:31:29
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Q: What is the difference between bonded and insured plumbers?
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Related questions

Are plumbing contractors required to be bonded?

Most states in the United States have laws that require plumbers to be insured and bonded. However, laws vary by states, and you can find each state's specific law at http://abc-7.findlaw.com/consumerbook/contractors.html.


Do you need a business license to be bonded and insured?

No.


How do you find out if a plumber is bonded and insured?

You ask him.


Are carpet intallers supposed to be bonded and insured?

Carpet installers are not required by law to be bonded and insured for all places, though for government buildings and a few others, it may be a requirement. However, it is much easier to find customers if you are bonded and insured.


How can I find licensed, insured plumbers locally in Tucson?

Your best bet when hiring a plumber is to rely on friends, family, neighbors and co-workers to recommend someone. Anybody with a good plumber is always happy to spread the word. Failing a reference, use the business pages (Yellow Pages/Yellow Book) to locate plumbers in your area. When contacting them, simply ask if they are licensed, bonded and insured.


What is the difference between bonded and blended leather?

There is no difference but they wear out much faster!


Does a landscaper need to be bonded and or insured in the state of Oregon?

no


Do demolition companies need to be insured or bonded?

anonymous


Is bonded and insured the same thing?

No. Bonding is a separate


What is licensed bonded and insured?

license......a business permit issued by a city or county government. The term bonded or insured is basically the same thing. Bonded usually applies if someone handles money or other valuables.


How do you determine if a handyman service is good?

Ask if they are insured and bonded


The greater the electronegativity difference between two bonded atoms the greater the percentage of what in the bond?

The greater the electronegativity difference between the two bonded atoms, greater is the ionic character of the bond.

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