The Difference Between Bonded and Insured (we are both)
Bonded and Insured. You see these two words together quite often. They are on our website to show our commitment to being professional, honest, and credible. They sound like the same thing, so what’s the difference?
We all understand that insurance protects the policyholder from financial loss in case of a fire, theft, or a natural disaster (and, of course, a home inventory helps ensure an equitable settlement).
A bond is purchased by the service company, but protects the clients. Known as a Business Services Bond, it is a promise against loss due to misconduct, such as theft or fraud. Therefore, it is extremely important to let you know that we are bonded.
Insurance is purchased because you anticipate the likelihood of loss. Conversely, loss due to fraud or theft is not expected. Therefore, bonds are only issued to qualified individuals; those who pass a background check.
The insurance claims process differs from the claims process for bonds
The bond claims process is also different from an insurance claim process. When there is an insurance claim, the insurance company pays the policyholder for the loss and the transaction is over. When a claim is submitted against a bond, the client is reimbursed by the company that issued the bond. However, the bond holder is required to reimburse the bond company.
Simply stated, insurance protects the business against loss, while the bond protects the client. So, rather than being the same, they actually go hand-in-hand. We choose to be bonded to assure our clients, future clients, and professional advisors that we are honest, ethical business owners who they can trust when referring us to others.