What does it mean for a contractor to be bonded, licensed, and insured?
One of our clients recently asked us, why is it important for me to hire only a bonded, licensed, and insured contractor for my construction project? This gave us the idea to put together a three-part blog series which we kick-off today, where we will explain the importance of Los Angeles homeowners and commercial property owners hiring only bonded, licensed, and insured contractors for their Los Angeles construction projects, including earthquake retrofitting, foundation repair and replacement, basement waterproofing, and caissons work.
What does it mean to be “licensed, bonded, and insured”
The expression, “bonded, licensed, and insured” gets used quite a bit in the construction industry. As a consumer of construction services, you may have heard this expression before, along with the advice that one should use only contractors who are bonded, licensed, and insured. But what do these terms really mean? This is a great question, and below are some quick and easy to understand explanations!
Why does a contractor need a license to do construction work
So, why does a contractor even need a license? When a contractor is licensed, this means that he or she has met a certain set of requirements, competencies, and tests, as set out by the State of California, in order to provide consumers with construction services. We always recommend for consumers to only hire contractors who have both a city business license, as well as a state contractor’s license!
Why would a person need to be bonded
So, why does a contractor need to be bonded? A bonded contractor is one who has purchased a “surety bond”, which protects the consumer from possible losses that result from incomplete work by the contractor, damage to the property, or other failures by the hired contractor in pursuing the work. As a consumer, if you are damaged by the contractor, you can file a claim and receive compensation for your losses from the “surety” (the insurance company) which issued the contractor’s bond. We always recommend for consumers to make sure that their licensed contractor also is bonded!
What does it mean when a contractor says they are insured
And then, why does a contractor need to be insured? When a contractor is insured, it means that he or she has purchased various insurance policies which protect the contractor from insured losses, and thereby protects the consumer as well. We always recommend for consumers to hire only insured contractors, as they are more secure and can do a better job at managing risks to their operations! In order to protect yourself as a consumer, you must hire only licensed, bonded, and insured contractors to work on your home or commercial property! Part Two in our Consumer Affairs Bulletin series provides helpful advice on how you can determine if your contractor is licensed!
At Weinstein Construction Corporation, we are of course licensed, bonded, and insured! Our family-owned Los Angeles business has been in continuous operation under the same name and state license since 1977, and during this time, we have provided more than 80,000 free inspections to residential and commercial property owners in the greater Los Angeles region! call Weinstein Construction today at (888) 412-8363 for a free inspection and review of all your construction needs!
