Sunday, April 14, 2024
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What Does “Licensed, Bonded, and Insured” Mean for You?

As a painting contractor, one of your main concerns is building trust with your clients. After all, you’ll be spending lots of time inside their homes. Making sure you are “licensed, bonded, and insured” is the first step in building that trust. But what exactly does it mean for you? Let’s break it down.


Most industries require various licenses before they allow individuals to conduct business. Painting contractors are not required to obtain a license in every state, but may be required to register with the appropriate state department. Sometimes painters are licensed the same way as regular contractors, and sometimes they need a different license. And occasionally, the city or county you live in will have its own regulations for painting contractors. Verify whether or not you need a license with your local and state contractor licensing departments. (“Bonded and insured” is just as effective a phrase if your state doesn’t require a license.)


“Bonded” means that the painter has purchased a surety bond, a measure that protects the consumer. Surety bonds are an agreement between three parties:

  • Principal – the person purchasing the bond
  • Obligee – the entity that requires the bond purchase, usually government
  • Surety – the company backing the bond and providing the line of credit if the principal does not uphold their obligations

To put it simply, the surety bond can provide reimbursement if the painting contractor violates any of the conditions of their bond. Purchasing a bond is the principal’s agreement to adhere to all laws—local, state, and federal—that govern their industry. If you don’t, the client can file a claim against your surety bond. If the claim is proven, the bond can reimburse the client for the amount of the claim up to the full bond amount. For example, if a client files a $6,000 claim on a $50,000 surety bond, the surety will pay the full amount if the claim is proven.

Licensed-bonded-and-insuredSome states might require painting contractors to get a license like many other kinds of contractors. In that case, you’ll purchase a contractor license bond. You’ll have to include proof that you are insured and bonded when applying for your license. Regulations vary widely, so contact the department that handles contractor licensing in your state for the best information.

If you’re not required by law to buy a surety bond, you can choose the bond you buy. Two popular bonds for client protection are business service bond and employee theft bonds. Cleaning companies, pest control companies, and other professionals that spend time in clients’ homes buy business service or employee theft bonds.

The purchase of a surety bond is an indication to clients that the painter has their best interests in mind and is willing to take additional steps to ensure they are protected. Verify your surety bond requirements with your state, county, and city before purchase. Whether or not you purchase one may be up to you, but check your local laws first.


Business insurance is different from surety bonds because it offers protection for the business, while bonds protect the consumer. Painting contractors usually purchase liability insurance, workers’ compensation insurance, and commercial vehicle insurance. Clients love a well-insured contractor; it shows trustworthiness and dependability and ensures they won’t be responsible if an accident occurs.

Being “licensed, bonded, and insured” is an easy way to convey to potential clients that your painting business can be trusted. You didn’t skirt around any laws to save yourself a dime and you put your clients’ well-being first. The phrase can be used when marketing your business, and you can tell your customers why you’re bonded: for them! Begin at the beginning when establishing yourself as an honest and upstanding businessperson—get licensed, bonded, and insured.

Melanie Baravik is a member of the Outreach Team at, whose aim is to educate consumers about the ins and outs of surety bonds.

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