A Guide to Bonding and Insurance for Contractors: Securing Your Projects from Start to Finish

Written By Charlotte Insurance on September 21, 2023. It has 0 comments.

A Guide to Bonding and Insurance for Contractors Securing Your Projects from Start to Finish

Contractors handle a number of different construction jobs depending on their specialty. Some may tackle things like concrete, masonry, and asphalt, while others are more in the building realm and work as carpenters, plumbers, drywall installers, roofing specialists and more. The one thing that all of these contractors have in common though is their need to be bonded and have insurance protection. Both options can prevent the contractor from having to pay a lot of money out of pocket should something happen during the course of the construction.

What’s the difference between bonding and insurance? Let’s explore both options and what coverage they provide.


Depending on the location, some contractors need to be both bonded and insured, while others can get away with one or the other. No matter what, bonding works in the same manner. In order to become a bonded contractor, you first need to reach out to a special company that offers the service. There are a number of qualifying factors involved that you’ll need to meet in order to even become bonded in the first place. This is done so that the company knows that you’re reliable and do quality work.

The bonding is done through a surety company and is good only for the project that it was taken out on. For example, a contractor can’t use the bond for a roofing job to provide protection for a deck-building job. The bond is sometimes paid for by the homeowner who hired the contractor, although this isn’t always the case.

When something goes wrong during the construction period or the contractor disappears and doesn’t finish the job for any reason, the bond can be called in and the surety company pays for any damages or expenses caused by the default. From there, the contractor needs to repay the surety company.


Insurance, on the other hand, works similarly to the insurance policies taken out by standard businesses. There are two main types of policies that contractors take out. The first is liability insurance and the other is workers’ compensation. There are additional options as well, including policies that protect their equipment, but the two previously mentioned are the most important and usually what most homeowners who hire contractors are looking for.

Standard liability insurance purchased by a contractor is designed to prevent the homeowner from having to call in a claim on their liability policy. For example, if one of the contractor’s employees is hurt on the job or damages an important part of the structure during construction, the contractor’s liability insurance will kick in and pay for the employee’s medical care or the costs of supplies to repair the damage.

In addition, workers’ compensation insurance is designed to cover workplace accidents. While liability insurance may pay for some of the medical costs, it’s best to use workers’ compensation insurance for these types of injuries. After all, this type of insurance is designed to pay for medical bills and related expenses, as well as the cost of missed work and other things.

Have Questions? Contact Charlotte Insurance

Want to learn more about bonding and insurance for contract projects? Contact Charlotte Insurance. Our agents can explore and explain all available options to you and put together the insurance coverage plan your business needs.

Leave a Reply

Your email address will not be published. Required fields are marked *