What does it mean when a contractor says they are bonded and insured?
When a contractor says they are "bonded and insured," they are referring to two separate types of financial protection:
Bonded means the contractor has purchased a surety bond, typically the $25,000 CSLB contractor license bond required in California. This bond acts as a guarantee. If the contractor fails to complete work properly or violates licensing laws, you can file a claim against the bond to recover damages up to the bond amount.
Insured typically means the contractor carries: General liability insurance: Covers property damage and bodily injury that occurs during the project. If a contractor accidentally damages your home or a worker injures a third party, this policy pays for it. Workers' compensation insurance: Required in California if the contractor has any employees. Covers medical bills and lost wages if a worker is injured on your property. Without it, you could be liable.
Always ask for certificates of insurance and verify them directly with the insurance company. A reputable contractor will provide these without hesitation. You can verify their bond status at cslb.ca.gov.
This information is provided as a general guide for Sacramento area homeowners. Actual costs and requirements may vary based on your specific situation. Always verify contractor licenses at cslb.ca.gov and check with your local building department for current permit requirements.