Licensed Registered Bonded or Insured Contractor?
Many contractors and service businesses use the designations licensed, registered, bonded, and insured. While these all sound similar, their differences are important when hiring someone for your project.
Licensed:
Contractors have been granted a trade license as mandated by state and local laws. It generally requires passing competency tests about business practices and trade skills, paying a fee, and proving insurance and/or bonding.
Registered:
Typically less stringent than licensing, it often requires contractors to prove insurance and pay a fee, only sometimes requires bonding and rarely tests competency. A few places use licensing and registration interchangeably.
Bonded:
Contractors have an arrangement with a third party (a private bond issuer or a recovery fund held by the licensing municipality). Homeowners may petition for reimbursement through that third party if contractors harm them financially because of shoddy work or failure to pay subcontractors as promised.
Insured:
All contractors you hire should be insured. Ask to see a Certificate of Insurance, then call to verify the policy is current and has enough coverage for your project.
