Whether you’re working on a siding replacement or a roofing project, it’s important to hire a reliable contractor to do the job. Companies who are bonded and insured can offer more financial protection when you encounter problems with your project or a worker gets injured.
Here’s the difference between contractor bonds and insurance, and why you need to hire a contractor who has both.
Contractor Bonds vs. Insurance
Contractor license bonds and surety bonds are credit lines and not considered as insurance. When obtaining a license, a contractor needs to get a license bond from a surety bond company against a premium. It’s an agreement among the contractor, the state licensing agency and the surety company.
Bonds ensure a contractor is qualified to perform the services they offer. For instance, if your window installation contractor didn’t complete the job to standards, the bonding organization will cover a portion of your loss. We recommend asking for a copy of your contractor’s license as bonding typically requires a valid license.
On the other hand, insurance protects contractors against lawsuits from property damage. The insurer will pay for any lawsuit against your contractor, increasing the chance that you will get compensated if you win. Request for a copy of your contractor’s insurance policy to determine its limits and validity.
Why Hire a Contractor Who Has Both
You can add a clause to your contract that requires your contractor to be bonded and insured. Make sure to ask them to notify you when there are changes with their insurance or bonding status. This way, you can cancel the contract if the status of your contractor changes or when they give misleading information about their insurance and bonding.
For superior exterior restoration services, choose Polar Builders Inc. We offer roof repair, siding replacement, window installation and more. Call us at (952) 679-8144, or complete our online form to request a free estimate. We work with clients in Minnetonka, MN.