Hiring a contractor who is not bonded, insured and licensed if applicable is a risk you don’t want to take.
Contractors should carry two types of insurance: liability and workman compensation. As a homeowner these protect you in 2 ways. First, liability will protect you if the contractor causes damage to your home. What if the contractor has an employee injures on your property? If he or she doesn’t have workmans compensation, there is little likelihood your homeowners policy will.
Bonding is often confused for insurance but there is a notable difference. A bond is a guarantee that the contractor will perform the work. It is secured money which will be given to the homeowner in the event the contractor failed to perform the work.
Finally you want make to sure your contractor holds the appropriate licensing if its needed. Licensing offers proof that the contractor has met certain industry training standards.