Surety bond
Also called: Bond, Licence bond, Performance bond, Bonded
A guarantee from a third party that you will do what you promised, which pays the customer if you do not. It is not insurance, and the difference matters: after a bond pays out, the surety comes to you for the money. When a homeowner asks whether you are bonded they usually mean a licence bond, which some jurisdictions require before they will issue a trade licence at all — and whether one is required, and for how much, varies by province and state.
This one depends on where you work
The rule behind surety bond is set by the province or state the work is in, and the versions do not agree with one another. We have described the shape of it and deliberately not named a deadline, a cap or a percentage — check the rule where you work, or ask someone who practises there.
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