If an individual or business is bonded and insured, it means it has taken measures to ensure the client has recourse if the job isn't completed or doesn't meet agreed-to standards and is protected from liability if a worker is injured on the job. In many cases, a business owner must be bonded and insured to secure the required local licenses.
To become bonded, the individual or business pays a surety company for a policy that protects customers. If the business representatives fail to perform the job properly, don’t pay for the supplies and worker labor or do such a shoddy job that the work needs to be repaired or redone, a homeowner or other client can file a claim with the surety company. A bond also covers employee theft -- for example, if a caregiver pilfers jewelry and is prosecuted for the crime. The bonding company will require proof that the job wasn’t completed as agreed or the business owner otherwise failed to fulfill his obligations before making any payments.
Insurance for contractors or businesses generally falls into two categories. Liability insurance covers property damage and injuries associated with the work. Workers' compensation insurance provides protection for workers injured on the job and compensates the families of those who are killed. Without either of these policies in place, a homeowner or other client might be liable for damage or injuries that occur while the work is being carried out.
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