Bonding and Insurance?

Question

Hi, I'd like to start a house cleaning business and would like to know what the difference is between insurance and bonding and if I need both of them. I will not have any employees for a while just me. A lot of times I see companies saying "insured and bonded". Of course I want to have whats right for the business but if I can have just ONE to start with that would help. Thank you.

Answer 1

For cleaning houses the bond, would be a Janitorial bond, (fidelity or Dishonesty bond) If the homeowner or contractor would accuse you or an employee of theft of a valuable.  

Liability insurance would primarily be for Property damage liability for example if you or an employee were cleaning and knocked over a candle and started a fire.  Liability insurance also provides other liability such as personal injury and advertising injury, also providing legal defense.

If it is just you, no employees i would say the liability coverage would be the ONE.. it is more comprehensive however it is more expensive.

Answer 2

Josh is on it about coverage.

The other big difference between bonding and insurance:  If the bondholder pays out any $$ YOU have to pay then back. With insurance, payout is eaten by the insurance company as claims cost.

Since bonds have to be payed back, your bond cost will depend on your companies (if established) or your own personal credit rating.