Location: 7 S. Warren Street, Dover, New Jersey

Explaining To Your Clients The Difference Between “Licensed, Bonded, and Insured”

Explaining To Your Clients The Difference Between “Licensed, Bonded, and Insured”

When potential customers are looking for new contractors, they prefer to see words such “licensed, bonded, and insured” however, most do not know what the difference is. Take the time to explain these terms, in the most understandable way, and protect and boost your business.

Being “licensed” means that you took the proper steps to follow state rules and regulations in order to obtain a license for a trade. Often, certain trades MUST have a license (example: electricians & plumbers). Some trades also require purchasing a surety bond as well.

Being “bonded” as a contractor means that you’ve purchased a surety bond. A surety bond is a type of insurance that protects the homeowner if a contractor doesn’t complete a job properly, doesn’t pay for permits or meet other financial commitments. It also can cover damage as a result of a contractor’s negligence.

Insurance, being “insured” is meant to cover claims by your employees in the event they get hurt on the job. Not having insurance, could lead to your employee filing a claim against your client’s homeowner’s policy, and will definitely lead to the loss of a client.

When contracting a new customer, it is best to explain to them what credentials you have. You’ll avoid the confusion and possible confrontation of the client not being fully aware of what the words you use to advertise yourself mean. Go through these terms carefully so that the customer understands what they’ll be getting if they decide to hire your business. At times, potential customers like to hire based on how confident they feel with a contractor, as opposed to hiring because of prices. Your website is a perfect place to share this information about your business. You may even want to share the number of your bond in case a client would like to confirm this information. Taking  the time to share this information will result in helping your business.