What Being Licensed and Bonded Means
You might have come across the terms bonded and insured from when you had your home renovated or had your plumbing system worked on. These are actually two kinds of coverage which contractors know a lot about. Contractors are required to undergo a certification process in order to gain license, and they are to secure for themselves a liability coverage and a license bond in order for them to operate legally. Both these types of coverage are designed to protect the end-users like you from any potential financial loss due to the work you’ve had done on your home.
Licensed. A contractor is deemed licensed if he or she owns a physical document in his/her name stating that he/she is certified to operate legally in the state that he/she and their business is in. If for instance a contractor wishes to operate in two connected states, he can acquire for himself two state licenses, one for each state he would wish to operate in. The testing and certification process for master plumbers or contractors is done to ensure that clients or homeowners are hiring competent and well trained practitioners to do the needed work for their homes. Licensure ensures clients that the people they employ to work on their homes is bound by a code of ethics, and that they are liable for insurance coverage and are required to comply to workers compensation laws. Bonded. The term bonded, when used in this context, means that certain jobs are overseen by a certain protection. In other words, when a contractor is unable to finish a job with a client, the latter can seek compensation from the contractor’s insurance company who is in possession of the bond. In the event that a certain irresponsible contractor suddenly decides to jump ship, the client he left won’t be at a total loss and won’t be burdened financially by the unfinished job. Furthermore, bonds protect clients from the financial damages brought about by potential damages to their property caused by the contractor. Bonds also protect clients from theft committed by the contractor or any people employed by him or her. In simpler terms, bonds protect clients from financial burdens brought about by problems caused by a hired contractor. In the event of unfinished jobs, clients are to be compensated financially so they may hire a different person to finish the job. Similarly, liability insurance also insures the client financially. The difference is, liability insurance isn’t limited to jobs. It provides total protection for employees and materials. For example, if a hired electrician accidentally damages the next-door neighbor’s wiring, the electrician’s insurance provider will be obliged to cover damages and repair costs for the problem.
Most municipalities require contractors to be bonded if the structure he is working on is public property. Nearly all types of businesses should have some sort of insurance policy against potential damages or other undesirable incidents that may occur. In some cases, companies require their employees to be covered with individual license bonds during their time working with them. Due to the process that entails the process of licensing and bonding, employers use this as an opportunity to get rid of potential employees or applicants that have criminal records or those that are of subpar quality. If you’re looking for a contractor to hire for some jobs that need to be done for your home, make sure you go with a company that is licensed and is bonded. If you are a contractor or a master plumber, you should procure a contractor license bond for Burlington County if you’re looking to set up shop there. If you work best with municipal projects, getting a bond insurance in Camden County should be a requirement you must not overlook if you wish to land jobs of this kind. Having a master plumber bond in New Jersey would require you to review and renew his license once every two years before a bond company for plumbers in New Jersey accepts for application for a bond. For businesses that work with the public to be able to effectively protect their own business assets, protection via something like a BOP in Gloucester should be a very wise investment.
When looking for a contractor to do certain jobs in your home, you should look for a company that is both licensed and bonded. If you are a master plumber, having a contractor license bond for Burlington County jobs will help you land more public work in that county. Most of the high paying jobs will require bond insurance in Camden County if municipal projects is what you are best equipped to handle. A master plumber bond in New Jersey requires the contractor to review his license every two years before a bond company for plumbers in New Jersey will write the bond application. As we mentioned, most businesses will have some type of business owner’s policy or BOP in Gloucester if they are working with the general public. It is just smart business to protect your business assets.
