Also known as: bonded and insured · licensed bonded and insured · what does bonded and insured mean
A shorthand phrase indicating a business holds the required government licenses and active insurance coverage to operate legally and protect clients.
"Licensed & insured" (often extended to "licensed, bonded, and insured") is a credential statement used primarily by contractors, trades, and service businesses. Licensed means the business holds the state or local government permits required to do its type of work. Insured means the business carries active liability insurance — typically General Liability and, where applicable, Workers' Compensation. Bonded means the business has a surety bond, which protects clients from financial loss due to incomplete work or theft by the contractor.
Licensed means the contractor holds the government-issued license required for their trade or jurisdiction. Bonded means they carry a surety bond — a financial guarantee that protects the client if the contractor fails to complete the work or causes financial harm. Insured means they have active liability insurance (typically General Liability and Workers' Comp) that pays for injuries or property damage caused during the job.
It depends on your state, trade, and the clients you work with. Many states require contractors (electricians, plumbers, roofers, HVAC) to carry General Liability and Workers' Comp before issuing a license. Large clients, general contractors, and platforms like Angi or Thumbtack require proof of insurance (a COI) before they will hire or list you. Even where not legally required, being insured protects you from paying claims out of pocket.
At minimum: General Liability insurance ($1M per occurrence is standard) covers bodily injury and property damage you cause on the job. Workers' Compensation covers your employees if they are injured while working. Some clients also require a commercial auto policy if you drive to job sites. A Certificate of Insurance (COI) is how you prove you are insured — your broker issues it, usually within 24 hours of binding.
Definitions are educational and may be modified by your specific policy language, endorsements, and state rules. For regulatory guidance, refer to the California Department of Insurance or the NAIC.
Last updated: July 2026.