What is the difference between bonding and insurance?

Bonding is a type of guarantee that protects your clients from financial loss if you fail to complete a job as agreed upon in your contract. For example, if a cleaning business is bonded, their client is protected if the cleaning business fails to complete the job as agreed or causes damage to the client’s property. The bond acts as a third-party guarantee, with the bond issuer guaranteeing payment to the client if a claim is made.

Insurance is a type of financial protection that protects a business from potential losses. For example, liability insurance protects a cleaning business from financial loss if they are found responsible for damaging a client’s property. Workers’ compensation insurance protects a cleaning business from financial loss if an employee is injured on the job.

It is recommended that cleaning businesses have both bonding and insurance in place to provide comprehensive protection for their business and clients.

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