Having people you do not personally know in performing tasks on your home, property or business is a very risky thing to do. This is why it is important to hire contractors how are not just licensed, but bonded as well. Otherwise you will be taking a huge amount of risks that may lead to other problems such as lawsuit, where implied warranties provided by the state may be void.
There’s a difference between a licensed and a bonded contractor—both of which you would have to consider before hiring.
A licensed contractor gives you assurance through government-based standards that your contractor is capable of any type of skilled labor, for instance, performing jobs on another person’s home. Electricians, plumbers and ‘dry wallers’ are usually required to have a license. Other general tasks need other types of licenses as required by the state. In many other states, being bonded sometimes becomes a prerequisite to obtaining a license.
A bonded contractor on the similar hand, means that your contractor has purchased a “surety bond.” This is a type of insurance policy protects a property owner from risks of further damages, for instance. If they fail to complete the job properly, this bond can provide compensation to a property owner. Here is some more info on contractor bonds.
So why should you only hire a bonded contractor?
Hiring licensed contractors are a given. Otherwise, it would be like hiring people illegally, by working for people without a government-mandated license. Without having a license just gives more reason that the contractor may also not be following other laws which includes having proper permit, skill and inspection requirements. Having a bonded contractor, on the other hand, is a choice you would have to take wisely, because bonded contractors give you the additive assurance that your warranty claims are protected. When hiring contractors in general, bonded ones protect you from bad workmanship at home or in your yard for instance.
Now even if you win a job quality complaint in civil court, there could still be a good chance that your contractor might not be able to pay you for the damages further caused—more so if he isn’t a bonded contractor. To explain things simpler, bonded (and licensed) contractors make them responsible for paying their damages and that you won’t have to worry much about it.
Additional tip: You may also contact your state licensing board to determine if your contractor is licensed and currently has good standing.