What does bonded and insured mean?

Bonded
Bonding is simply a way for you to be reimbursed if a person or company doesn’t fulfill its contract, do the work that was agreed upon or even steals stuff from your home. If any of these things were to happen after you’ve hired help, you could file a claim against the company (or other household employees) with the bonding company.

A bonding company holds money that has been secured from the company and will pay out your claim after they investigate and agree that you should be compensated. They act as a neutral third party to settle disputes between a company and their clients.

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If you deal with a company or person that is not bonded, there is no claim process to deal with any disputes. You will have to rely on the goodwill of the helper you’ve hired. But the problem with that is that they can simply choose to ignore your complaints, refuse to refund your money or completely cut off communications. Your only option would be to sue them, which can quickly get expensive.

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Insured
While dealing with a bonded company is important, making sure they are insured is absolutely essential. The hired companies’ insurance policy will cover any injuries, health problems, or damage done during their work at your home. If they are uninsured and anything happens, the financial repercussions will fall to you or your homeowners insurance.

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For example, if a house cleaner is injured on your property, they would file a claim with their own insurance company to cover their medical bills, lost wages and any damage they may have done to your home. It doesn’t just cover medical issues. If the house cleaner leaves a faucet running that floods your bathroom floor and does significant damage to your home, their insurance will cover the cost of repairs.

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On the other hand, if you hire an uninsured cleaning company, you may end up on the hook for these types of expenses and, in a worst-case scenario, find yourself being sued by the uninsured cleaner you hired. While you can certainly make a claim on your homeowners insurance, depending on the circumstances, it may be denied, and even if they pay up, you will have to pay your deductible. Your rates will climb, so the accident will end up costing you money one way or another.