What Does Bonded & Insured Mean?

A business must have some type of insurance for financial safety reasons. The type of insurance will determine how the business is covered in case of accidents. Being bonded and insured provides a business or company full financial coverage from damage, theft or any other issues.

Bonded

Bonds are made to protect specific jobs, providing coverage is not completed to satisfaction. This allows a client to make a claim to be reimbursed or compensated for any money lost if a contractor quits or abandons a project without completing the project. A bond can also cover any damage cause by theft of a baby or house sitter, damage caused by a moving company and problems related to job satisfaction.

Insured

To be insured means covering specific types of losses. This applies to the employee or contractor. For example, if a housekeeper damages something in the home of the client on accident, the bond will not cover any compensation to the housekeeping service if the employee is unable to continue working until the home is fixed or free of the damage caused. The insurance covers any loss of work time and hours. A bond would cover this, because the job is not complete to satisfaction, but being insured does not.

Being Bonded And Insured

Those businesses that are bonded and insured will have full financial coverage. Federal government contracts require contractors to be bonded and insured, to reduce the financial risk. House cleaning services, moving companies and pet sitting companies are bonded and insured in case any thievery, accident or other damage caused by the company.

Employees That Are Bonded And Insured

Some representatives of a company are bonded and insured for financial reasons that occur outside of the business. For example, if a person is robbed at the business, the business is insured and bonded, therefore all monies can be reimbursed by the insurance and bond companies. However, if a person leaves the company grounds with money to run errands or make a bank deposit, only the people the company has listed under the bond or insurance policy are protected from cases of theft outside of the business. Therefore companies will want to bond and insure more than one employee for a backup in the event the other employee is injured, ill, on vacation, quits or is fired.

General And Limited Liability

Those companies and businesses that have general liability will not help their employees or equipment. If damage is caused and the employer needs to purchase new machinery or other equipment, and the employee has to take time off as a result, limited liability will not cover this. A company will need to be bonded and insured to cover those incidentals. The premiums to purchase bonding and insurance can be high, but it is worth it when accidents or damages occur.

References

• Bonded And Insured