Northwest North Carolina - April 19, 2011 - When selecting a business to work around your home you are always told to make sure the business is licensed, bonded and insured. "Sounds easy enough" said David Dalrymple, President of the BBB serving Northwest North Carolina, "yet I wonder why more people don’t do it? It is unfortunate, but we often hear from consumers that have discovered the hard way that while the business said they were licensed, bonded and/or insured, when problems arose, they found it was not true."
Starting in February 2011, we began surfing the internet, thumbing through phonebook ads, scanning area newspapers and other advertisement mediums we could lay our hands on to search for ads from area businesses that claimed to be either licensed, bonded or insured. We contacted them by mail and asked them for proof of their claims. If we did not receive a response we contacted them a second time. And finally, if we did not receive a response to our second request, we sent another letter informing the business that we had closed our advertising inquiry as unsubstantiated and that this concern would be reflected in their BBB business review. Here are the results of our advertising review:
• 56 area businesses were contacted.
• a combined total of 91 different claims of licensed/bonded/insured were challenged.
• 59% of all those contacted provided documentation that supported their claims.
• 41% of those contacted did not provide any documentation.
Comparing BBB Accredited Businesses to non-BBB accredited:
• 27% of non-BBB accredited businesses provided supporting documentation (73% did not).
• 96% of BBB accredited businesses provided supporting documentation (4% did not*). *One BBB accredited business did not respond and is currently suspended pending review and termination by the BBB board of directors.
So how do you go about confirming for yourself whether a business is properly licensed, bonded and/or insured? Well, it is really very simple. Start with the business -
Licensed?:
Ask them if they are licensed and if so with whom. And then contact the licensing agency to confirm this fact. We are happy to help should you need assistance in determining what licensing requirements exist for each industry.
Insured?:
Ask the company to have their agent send, directly to you, a Certificate of Insurance. Typical insurance coverage includes "general liability" that protects you in the event any damage happens to your property during work performance and the other is "workers' compensation" that provides for employees hurt on the job. If either of these is not provided by the business then guess whose insurance is probably going to pay……yours! Why should the certificate come from the insurance company instead of from the business? Because that way you can be sure the business is currently covered by that policy and that all terms such as payment of premiums has been done by the business.
Bonded?:
Bonding is actually a very misunderstood and unique insurance product. Basically, bonding is given to a business by a third party who promises to pay if a business experiences employee theft or dishonesty or does not fulfill their work obligations under a contract. How do you find out if the business is bonded? Similar to insurance, proof should be provided directly to you from the insurance company.