Bonded, Licensed & Insured: What It Actually Means

You've probably seen the phrase "bonded, licensed, and insured" in a cleaning vendor's marketing. It sounds reassuring, but many property managers don't know what each term actually covers -- or why the distinctions matter when something goes wrong in your building.

What "Licensed" Means

A business license means the vendor is legally registered to operate in your state or municipality. It's the baseline requirement for any legitimate business -- ask for their registration and verify it if you want to be thorough.

What "Insured" Means

General Liability Insurance

Covers property damage caused by the cleaning crew (a broken fixture, chemical damage to flooring) and third-party injuries resulting from their work. Ask for the coverage limits, and for larger buildings ask about higher limits.

Workers' Compensation Insurance

If a cleaning employee is injured in your building, workers' comp covers their medical expenses and lost wages. Without it, your building could be exposed to those costs even though the worker isn't your employee. This is the coverage most often missing from underpriced vendors.

What "Bonded" Means

A surety bond (sometimes called a janitorial bond) is financial protection against employee theft. If a cleaning employee steals from your building and the vendor is bonded, you can file a claim to recover the loss.

How to Verify

Always ask for a certificate of insurance (COI) before signing anything. It lists the insurer, policy numbers, coverage types, and expiration dates. Request to be named as an additional insured so you're notified if coverage lapses.