Angie's List: The real meaning of bonded, insured

Posted at 4:32 AM, May 27, 2019
and last updated 2019-05-27 11:35:42-04

Many contractors will promote that they’re bonded and insured. But what does that really mean for you as a consumer? In this week’s Angie’s List Report, we learn from Angie Hicks, the importance of asking about bonds and insurance.

You’ll see it on their ads, their website, maybe even the side of their truck. The roofer or builder you might hire is ‘bonded and insured.’ Although contractors promote this status, few consumers truly know what it means, let alone what it means if their contractor doesn’t have it.

"A bonded contractor has purchased a surety bond, and that’s basically like an insurance policy against acts from the contractor. So, for example, if the contractor leaves the job unfinished or fails to pay for supplies, these types of things will protect the consumer because they can put a claim in against that bond," said Angie Hicks, Co-founder of Angie’s List

Consumer protections like a surety or fidelity bond are especially important for those high-dollar home improvement projects that could really cost you if they go wrong. In addition to bonding, be sure to ask about the types of insurance your contractor has, too.

Hicks says general liability insurance is going to cover you if there’s damage done your property outside the project. So a great example would be if they’re there to mow your lawn but they run into your mailbox while mowing your lawn, their insurance would potentially cover that mailbox. The other type of insurance that’s important is workers comp insurance. And that’s going to cover the contractor’s employees if someone is hurt on your property. So, if they’re redoing your roof, someone falls off the roof, that workers comp insurance is going to cover their injuries instead of it actually coming back and hitting your homeowner’s insurance.

It may be extra work to find the right professional with both bonding and insurance, but it’ll be worth it to you as the homeowner, in the event that things don’t go exactly as planned.

"Hiring a contractor that’s bonded and insured is a protection to the consumer. It’s going to financially protect you if things go wrong. And it’ll also keep things from hitting your homeowner’s insurance, which could cause your premium to go up, or could cause you to have to pay a deductible," said Hicks.

One important tip to remember is to ask for proof of bonding and insurance right from the beginning. It may be nearly impossible to get the information necessary to file a claim if you wait until the project has derailed.

When you’re interviewing your contractor, be sure to ask for copies of their insurance and bonding certificate. That’ll have all of the information you need to know in case something goes wrong. That way you have it handy and you can access it, in the event you need it.

For more information about finding and hiring pros who are bonded and insured, check Angie’s