What does it mean when a company says it is bonded, licensed, or insured? It means that the customer can have confidence that they are dealing with a trusted, reputable business. Even more importantly, it means that, if a contractor doesn’t finish a job, or completes the work improperly, you, the homeowner, have financial protection.
Doing business with a licensed, bonded and insured contract means that you can rest easy, knowing that your project is being handled by professionals you can trust.
How does it all work?
When hiring a contractor, it is important that the company should be bonded. To become bonded, a company must deposit a certain amount of money with a surety company. That surety company then agrees to cover the homeowner’s costs if (following an investigation) a project is found to have been done incorrectly or not completed. In other words, the risk is on the surety company, not you, the homeowner.
When you are doing business with a contractor, make sure you ask them for a bond number and certification. (And of course, you will always get something from All Craft Exteriors.)
Licensing is another important component of making sure that a contractor is reputable and reliable. Requirements differ from state-to-state; but, in general, to be licensed, a contractor has had to meet certain basic requirements. First, they are required by law to carry the appropriate insurance policies to protect both themselves and their customers. Second, they are required to complete continuing education classes every year.
NOTE: In the state of Minnesota, contractors are also required to participate in the Minnesota Contractor Recovery Fund, which helps homeowners who have been the victim of fraud or who hired a company that failed to finish the job. Only Minnesota homeowners who do business with a licensed contractor have access to this protection.
All Craft Exteriors is licensed in Minnesota, Iowa, and Wisconsin.
A trustworthy contractor will be fully insured in at least two ways: workman’s compensation insurance, and liability insurance.
Having workman’s compensation insurance means that, if one of the contractor’s workers is injured while working on your property, the insurance claim will be paid by the contractor’s insurance company. If they don’t have workman’s comp, then the burden of paying for that injury might well fall on your homeowner’s insurance. That, of course, means you’ll be stuck paying higher rates for your homeowners’ policy going forward.
A reputable contractor will also carry liability insurance. This insurance covers damage done to the homeowner’s property by accident, or incompetence. (Example: a job trailer is backed too close to a garage door and damages it.) This is in addition to their bond, which protects you against subpar workmanship.
Your home is your biggest investment. You want to know that it is safe and sound and that all the work you’ve put into to acquiring it and taking care of it is protected. That’s why All Craft Expertise is proud to say that we are licensed, bonded, and insured. It’s one more way that you know we mean what we say when we tell you we are “Built on Trust!”
If you’d like to learn more about bonding, licensing, and insurance, Angie’s list has a good article here written in plain English.