What Does it Mean to be a Licensed and Bonded Contractor?


If you are undertaking a project that requires the services of a contractor it is important to ensure that you hire the one who is duly licensed and bonded. It is risky hiring an unlicensed contractor as you would be liable for any losses or incomplete jobs resulting from the acts of such professionals. You will also be liable to be sued for any accidents or claims emanating from the project being carried out by an unlicensed contractor. It is, therefore, important to ensure that you only go for the fully licensed and bonded contractors to be safe.

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Here is a detailed explanation of the differences between the two:

Licensed Contractor

Different laws on a contractor’s license exist in the various states. A license is required for any person doing any skilled labor in other peoples’ homes or properties. This is usually the case for plumbers, electricians or drywall contractors. There are various requirements that are set by different states for these professionals to get a general contractor license. There are states that impose stringent requirements like a minimum education level or work experience to obtain the important licenses. There is also a requirement to undertake an examination of different levels for a contractor to earn the right to handle a certain size of jobs. There are some states that require a contractor to have a compensation insurance policy before they are issued a license.

Bonded Contractor

The fact of being bonded is quite different from being licensed despite the fact that the two are often related. A bonded contractor means that the expert has bought a surety bond. This is the kind of insurance policy that is tailored to protect the property owner. It offers a certain degree of protection from liability when the contractor fails to perform or complete the job as per the terms of their agreement. It is meant to offer compensation to the property owner.

For the property owner to receive the bond, they must first make a claim and win it before the state contractor’s board. The property owner ought to prove that the contractor did not uphold their part of the bargain. The property owner should also try and get their money from the contractor before resolving to move to the contractor’s board. The amount of money paid out in the form of bonds depends on the size of the original bond and whether there are any other claims made against it. You should consult your lawyer first before signing a construction agreement with a contractor to find out the amount that would be available for your protection in case things don’t work out as planned.

Final Words

All the above are plausible reasons that answer in detail the question; What does it mean to be a licensed and bonded contractor? It is advisable to only hire licensed contractors as contractor bonding provides protection until your project is completed in full. Hiring bonded and licensed contractors also protect you from lawsuits as well as give you peace of mind during undertaking a contract. You should avoid working with an unlicensed or unbounded contractor to avoid the various hazards associated with hiring them.

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