Legal Question in Business Law in Illinois

Re: licensed and bonded vs. insured

You obtain a license to do business from the town, village or county. Bonding, assures the customer that your workers are honest, and insurance takes care of damages caused by your workers by negligence and workers compensation in case the workers are injured. Any reputable insurance agency can take care of a bond and insurance.

Re: licensed and bonded vs. insured

The three are all different.

Licensed.

The state of Illinois does not require licensing of house cleaning businesses but businesses must generally register with

the appropriate state agency to submit tax or informational returns or to collect and remit sales taxes. In Illinois, business owners must contact the Department of Revenue to determine if an Illinois Business Taxpayer Certificate of Registration (Business Tax Number) is required for the business.

In addition, many localities require a business license before commencing business in that city or county. Check with your city or county.

Insured.

When someone asks if you are insured, they want to know if you carry appropriate insurance to cover damages caused by your business. In your case, a customer would generally be concerned with both liability insurance and workers compensation insurance. For example, if you or one of your employees inadvertently starts the house on fire, backs out of the driveway into the path of an oncoming car, or trips on a loose carpet, the homeowner wants to know that the damages are covered by adequate insurance. Talk to an insurance agent about these policies.

Bonded.

Bonding is similar to insurance but with a slightly different focus. When you are bonded, the homeowner is protected against such things as theft of jewelry or other valuables by you or one of your employees. Many homeowners will not want an unbonded company working in their house.

David K. Staub, an Illinois business lawyer