What Does It Mean to Be Licensed, Bonded and Insured?

Today we are going to go over the importance of selecting the proper water damage firm to perform your task. In the event where your situation is not critically time-sensitive and you have time to do research before calling, finding an established agency is the key to protecting your property and making sure the quality of your job is at an acceptable level. Working with unaccredited or uninsured agencies may save money upfront, but the risks involved can outweigh any immediate benefit and have long-lasting consequences should anything go wrong.


Most water damage companies that are reputable will advertise the fact that they are licensed, bonded and insured - but in actuality what does this really mean? To the average consumer, these are often just buzzwords that companies like to display in order to establish their trustworthiness, but each term does have a different meaning and indicates a specific type of consumer protection. Let's review each one in turn and discuss why they are important.

Licensed

In most trades, a license is an indicator that the contractor is competent enough to conduct business in a particular state. Keep in mind that a license is actually not a requirement for water damage restoration; however, finding a licensed contractor is always preferable, particularly in restoration since the overall cost of a job tends to be very high. For water damage and restoration, the IICRC, or Institue of Inspection Cleaning and Restoration Certification, is the authoritative body in the industry. All IICRC-certified technicians are held to high standards of quality and performance established in order to unify quality of work across the country, and you can be sure that any respectable restoration firm will proudly display their IICRC certification as a badge of honor.

Bonded

Bonds are a type of consumer protection in which a certain amount of money is pre-paid into an escrow-type account outside of the restoration firm's control. These funds are used in the event that a job is not completed or not performed according to contract. In the event that a consumer feels that this may be the case, they can file a claim agaisnt the bonding company to appropriate these funds to make up for the difference. The bonding company will pay out these funds in the event that the claim is valid. Bonding is critical to protecting the consumer from unscrupulous contractors and firms, as the funds are a sign of good faith that the agency will perform the job that they state they will. Before hiring a restoration agency, be sure to conduct research and verify that the company you hire is bonded.

Insured

Insurance is the most commonly understood type of protection and is typically displayed alongside bonding. While bonding is protection for the consumer, insurance is protection for the contractor, in that it will provide coverage for them in the event that they suffer injury. An uninsured company can potentially file a claim for work-related injury against the homeowner and their insurance policy, causing many problems and financial aggravation. Proper insurance will protect both parties to ensure that all claims are sent to the appropriate area so neither side has to wrangle with potentially costly legal fees and dealing with adjustors.

So to recap, here is a summary of each term:

- Licensed: The firm is certified to legally perform the work required up to industry standard.
- Bonded: The firm financially guarantees that it will perform the work and to protect homeowners from loss.
- Insured: The firm provides coverage for its workers in the event of injury to prevent homeowner liability.

Ultimately, the decision of what type of water damage company to use will rest upon you as the homeowner. Remember to always research beforehand, not only with the company directly but through references both on the Internet and locally. Call the company to speak with them first, and search online for reviews and recommendations. Just because a company claims that they are licensed, bonded and insured when you speak with them does not necessarily mean that they may actually be, and a single missing link can be the difference between a smooth and successful restoration job or a insurance nightmare. A little time spent beforehand can save you a lot of time later down the road.

Superior Restoration is a fully licensed, bonded and insured water damage restoration firm, servicing the entire Southern California area for over ten years.