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Checking a contractor means verifying three separate things before you pay a deposit or sign: the government license or registration, insurance that is active for the work, and references from comparable projects. A license does not prove insurance, a certificate of insurance does not prove today’s coverage, and a bond is not liability insurance. Use the official licensing database, call the insurer independently, and speak with at least three recent clients. Requirements vary by state and locality, so confirm the rules where the property is located.
This is a U.S. homeowner procedure, not legal advice. State and local agencies control licensing, insurance, permits, deposits, and cancellation rights.
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Ask for the contractor’s full legal name, registered business name or DBA, license or registration number, issuing state, business address, and the name of the qualifying individual. Get the same information for any company that will sign your contract. The name on the estimate, license record, insurance certificate, and contract should identify the same legal entity.
Ask for a written scope of work, estimated start and completion dates, proposed payment schedule, planned subcontractors, permit responsibility, and at least three client references for similar jobs. A contractor who will not provide a license number or insurance-agent contact is giving you useful information before you spend money.
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How do I verify a contractor’s license and insurance?
Use this order: identify the legal entity, check the official license record, confirm that its classification covers your project, obtain an insurance certificate directly from the agent, and call the insurer using an independently found telephone number. Then verify workers’ compensation, bonds, references, permits, and public records.
- Write down the identity. Record the legal name, DBA, license number, qualifying person, physical address, and every trade the contractor says it will perform. A marketing name or truck number is only a starting point.
- Search the government database. Search by license number, business name, and qualifying person. Confirm that the status is active, not expired, suspended, revoked, or inactive; the legal name matches your contract; the address is real; and the expiration date extends through the expected project.
- Match the classification to the scope. A plumbing credential does not authorize general building work. Specialty classifications may cover only electrical, plumbing, HVAC, roofing, or another defined trade. If the contractor will use subcontractors, verify their credentials too.
- Read the history. Note bond and workers’ compensation fields, complaint disclosures, disciplinary actions, and renewal dates. One old, resolved complaint is different from repeated recent actions, but either should prompt questions.
- Request insurance directly from the agent. Ask the contractor to have the agent send a current certificate of insurance (often an ACORD 25 form) to you before signing. List yourself and the project address as certificate holder when appropriate.
- Call the insurer. Find the insurer’s phone number on its own website or another independent source, not only on the certificate. Ask whether the policy is active today, whether the named insured, policy number, dates, limits, and work description match, and whether any exclusions apply.
- Verify workers’ compensation and exemptions. Obtain a workers’ compensation certificate or a state-filed exemption, and confirm it with the insurer or state record. Repeat this for subcontractors who send workers to your property.
- Re-check before major payments. On a long project, set a calendar reminder for policy and license expiration dates. Save the certificate, dated government-record screenshots, names of people you called, and copies of all correspondence.
What is the difference between a license, insurance, and a bond?
They answer different questions: a license or registration is government permission to perform a defined class of work; insurance transfers specified losses to an insurer; and a surety bond provides a limited guarantee for the defaults covered by that bond.
| Credential | What it generally does | What it does not prove |
|---|---|---|
| License or registration | Shows authorization for a stated trade or construction class. | Current insurance, financial strength, workmanship quality, or permission to perform work outside the classification. |
| Commercial general liability | Usually responds to covered bodily injury or property damage the contractor causes to others. | Payment to redo the contractor’s own defective work; that is commonly a contract, warranty, or bond issue. |
| Workers’ compensation | Provides the statutory injury system for the contractor’s employees. | Coverage for every person on site, especially if a subcontractor has no policy or exemption. |
| Surety bond | Pays covered claims up to the bond amount and conditions stated in the bond. | Liability insurance, unlimited recovery, or proof of competence and integrity. |
The Federal Trade Commission advises homeowners to ask for current certificates for personal liability, workers’ compensation, and property-damage coverage. Its Hiring a Contractor brochure is dated March 2014; use current state statutes and agency pages for today’s dollar limits and cancellation rules.
How do I search the official license database?
Start with the state licensing board or, where no statewide general-contractor license exists, the city or county building department and consumer-protection agency. The FTC notes that many states require licensing or bonding, but not all do; trade licenses can still apply where general contractors are registered locally.
Search the record by number, business name, and personnel name. A screenshot supplied by the contractor is not verification. On the result, confirm active status, classification, legal name, address, bond, workers’ compensation information where displayed, complaint and disciplinary history, and expiration.
California’s CSLB Check a License tool searches contractor licenses and Home Improvement Salesperson registrations by number, business name, or personnel name. California license numbers contain no letters and have no more than eight digits. The database is unavailable Sundays at 8 p.m. through Monday at 6 a.m.; the page does not specify a time zone. CSLB says a license number on an advertisement, bid, card, or truck does not itself prove that the license is valid. When a bidder visits your home, ask for the pocket license and photo identification and make sure the person matches the record. California salespeople must also carry Home Improvement Salesperson registration when required.
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If your state has no statewide general-contractor license, do not assume there are no credentials to check. A municipality may require registration, and electrical, plumbing, and HVAC work is commonly regulated separately. Ask the building department which entity issues permits and which trade licenses apply.
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How do I verify a contractor’s insurance?
A certificate of insurance describes coverage on the date it was issued; it is not conclusive proof that the policy remains active or that you have rights under it. The most reliable practical check is an agent-issued certificate followed by an independent call to the insurer.
- Check that the named insured is exactly the legal entity on your contract. A certificate for an owner’s old sole proprietorship or a different LLC may not cover your project.
- Record the insurer’s real name, policy numbers, commercial general-liability and workers’ compensation lines, effective and expiration dates, per-occurrence limit, and aggregate limit.
- Make sure the dates cover the entire expected work period. If the policy expires during construction, obtain written renewal evidence and re-check it before the next progress payment.
- If you need additional-insured status, request the actual endorsement. Words typed in the certificate’s remarks section are not the endorsement itself.
- Call an independently sourced insurer number. Ask whether the policy is active today, whether the named insured and limits match, whether remodeling, roofing, excavation, or other planned work is excluded, and how cancellation notices are handled.
There is no federal dollar minimum for contractor general liability in the FTC brochure. Consumer guides commonly suggest requesting at least $1 million per occurrence and $2 million aggregate, but those are homeowner risk preferences, not a universal federal rule. California’s CSLB expressly says commercial general liability is not required, while noting that it can pay for damage to your property. Ask for it on any job where a serious loss could exceed your own policy’s limits, and ask your insurer how an uninsured contractor would affect your coverage.
Never accept “your homeowner’s policy covers my workers” as a substitute. Your policy is not the contractor’s liability or workers’ compensation policy. A contractor who says insurance is “being renewed,” refuses an agent-issued certificate, or asks you to rely on a photocopy is a reason to pause.
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What if a contractor says they do not need workers’ compensation?
Ask for a current workers’ compensation certificate or a documented exemption verified with the state or insurer. Whether a sole proprietor may legally be exempt depends on state law; a verbal claim that the contractor “works alone” does not establish an exemption, especially if helpers or day laborers appear.
In California, a contractor with employees must carry workers’ compensation. CSLB also requires workers’ compensation or a valid certification of self-insurance for active licensees in C-8 Concrete, C-20 Warm-Air Heating, Ventilating and Air-Conditioning, C-22 Asbestos Abatement, C-39 Roofing, and C-61/D-49 Tree Service classifications, whether or not they have employees. CSLB warns that an injured worker may pursue the property owner if the contractor has no coverage. Ask your own insurer what protection, if any, your homeowners policy provides.
Subcontractors are a separate check. The prime contractor’s policy does not automatically insure every subcontractor. Obtain each subcontractor’s license, insurance certificate, workers’ compensation proof or exemption, and written responsibility for permits and cleanup.
What does a contractor license bond cover?
A license bond is a limited surety promise, not a fund sized to your project. Confirm the bond number, amount, obligee, expiration, and claim procedure on the license record or with the surety using an independently sourced telephone number.
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California CSLB states that licensed contractors must carry a $25,000 contractor license bond. CSLB also warns that this amount may be insufficient for multiple complaints or a project worth more than the bond. A separate contract bond can guarantee completion and payment for labor and materials, generally only up to its face amount; CSLB says its cost is usually 1% to 2% of the contract price. A blanket performance-and-payment bond on file with CSLB is unusual—CSLB says only about two dozen licensees have one—and is the exception to California’s ordinary down-payment cap.
How should I check contractor references?
Request at least three clients whose projects resemble yours in size, type, age, and complexity. The FTC says a contractor should provide names, addresses, and phone numbers and that you may ask to visit a job in progress.
Ask each reference:
- When was the contract signed and when did the work actually finish?
- Was the final price different from the bid, and were change orders priced and approved in writing first?
- Did workers protect the home, arrive as promised, communicate delays, and clean up?
- Were permits obtained by the contractor, and were inspections passed?
- How did the contractor handle defects or warranty calls after final payment?
- May you see a finished project several months old to judge how it has held up?
References limited to tiny jobs, brand-new projects, or people who cannot be reached are weak evidence. CSLB recommends at least three written bids on identical plans and scope and warns against automatically accepting a bid substantially lower than the others. Ask suppliers, lenders, friends, and subcontractors whether the business is financially responsible, and verify a physical business address rather than relying only on a cellphone.
Which public records add useful context?
Public-record checks supplement—never replace—the license-board search and insurer call.
- BBB: Search the profile for complaint patterns, responses, and government or licensing actions. The Better Business Bureau says it is not a government agency and has no regulatory power. Ratings run from A+ to F; customer reviews do not affect the rating, and accreditation is voluntary.
- OSHA: Use the Establishment Search to review inspections, citations, and violation details. Match the address because names can be similar. No inspection record is not a clean safety bill; it may simply mean no inspection was entered under that name. The search reflected data through November 11, 2026.
- Business entity: Search your secretary of state for active or good-standing status. A dissolved or inactive entity deserves an explanation before you contract with it. Court and bankruptcy searches can add context but are not substitutes for licensing records.
- Lead-safe certification: For paid work disturbing paint in a home built before 1978, EPA’s Renovation, Repair and Painting rule requires a certified firm and trained employees. Use EPA’s lead-safe firm locator, or the authorized state program in Alabama, Delaware, Georgia, Iowa, Kansas, Massachusetts, Mississippi, North Carolina, Oklahoma, Oregon, Rhode Island, Utah, Vermont, Washington, Wisconsin, or the Minnesota Chippewa Tribe–Bois Forte (Nett Lake). EPA estimates that approximately three-quarters of U.S. homes built before 1978 still contain some lead-based paint.
Membership in a trade association or an online directory is not a license, bond, or insurance policy.
What should the contract and payment schedule say?
Get a written contract even when local law does not expressly require one. Include the contractor’s legal name, address, phone, license number where required, scope, start and completion estimates, payment milestones, permit responsibility, change-order procedure, materials and allowances, warranties and who honors them, exclusions such as cleanup, and every material promise made orally.
Tie progress payments to completed, inspectable portions of work. Do not pay cash, sign blanks, or make the entire payment up front. Before final payment, require a clean site, warranties, satisfactory completion, and lien releases or waivers from the contractor and from subcontractors and suppliers. A conditional waiver takes effect when payment clears; an unconditional waiver represents money already received. State lien laws may allow an unpaid supplier or subcontractor to claim against your home even after you paid the general contractor.
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California CSLB states that a home-improvement contractor generally cannot demand more than 10% of the contract price or $1,000, whichever is less, unless the rare blanket performance-and-payment bond exception applies. Do not export that rule to another state; ask the local licensing or consumer agency for its deposit cap.
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The FTC Cooling-Off Rule may apply when you sign at home or another location that is not the seller’s permanent place of business. Under 16 CFR Part 429, covered transactions are generally $25 or more at your residence or $130 or more at certain temporary locations. The seller must provide a completed cancellation form and the statement: “You, the buyer, may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction.”
The rule has exceptions, including a narrow repair-or-maintenance situation and a handwritten waiver for a bona fide immediate personal emergency. State law may provide stronger rights. Read the contract before signing, keep the notice, and follow the specified cancellation method and deadline.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What are the California checks?
Use CSLB’s license lookup or call (800) 321-CSLB (2752). Confirm active status, matching classification, legal name and address, bond, workers’ compensation, complaint disclosures, and expiration. CSLB states the contractor license bond is $25,000, commercial general liability is not mandated, and workers’ compensation is required for contractors with employees plus the listed classifications even without employees.
For a home-improvement project, CSLB states the ordinary down payment cannot exceed 10% or $1,000, whichever is less, absent the blanket-bond exception. Get three bids on identical scope and investigate any unusually low bid. Do not rely on an unverified claim that California law uses a particular project-dollar threshold; confirm current requirements with CSLB or the code before signing.
What are the Washington checks?
Search the contractor on Washington Labor & Industries’ Verify tool, then obtain an agent-issued certificate and call the insurer. RCW 18.27.050 states statutory financial-responsibility amounts of $50,000 for property injury or damage, $100,000 for injury or death to one person, and $200,000 for injury or death to more than one person. The statute also says expiration, cancellation, or revocation automatically suspends registration until a new policy or reinstatement notice is filed and approved.
Those are statutory floors, not a recommendation that the limits fit your project. A separate combined-single-limit figure sometimes quoted in guides was not confirmed in the statute reviewed here. Check workers’ compensation accounts, subcontractor certificates, and policy dates again if construction runs beyond the original term.
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What red flags mean I should stop?
- No license number, or a number that does not return on the official site under the contracting name.
- A classification that does not cover the work the contractor will perform.
- An old photocopy or certificate photo that the agent will not reissue directly to you.
- A named insured different from the contract entity.
- A policy expiring mid-project with no verified renewal.
- An insurer whose independently sourced phone number cannot locate the policy.
- “Your homeowner’s insurance covers my workers,” with no workers’ compensation proof.
- Employees or day laborers on site with no verified coverage or exemption.
- A deposit above the local legal cap, cash-only terms, or a demand for the full price up front.
- Pressure to sign immediately, leftover-material stories, door-to-door storm offers, or a request that you pull the permit.
- References who cannot be called or whose projects are nothing like yours.
Pause the project, do not release additional money, and contact the licensing board, insurer, building department, or an attorney if a credential becomes inactive or a serious misrepresentation appears. Keep every bid, contract, change order, invoice, text, certificate, photo, and payment record together.
How do I compare contractors who pass the checks?
Compare verified risk, not just price. Use the same written scope and plans for each bidder, then score each candidate on:
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- Matching named insured and policy dates covering the schedule.
- Liability limits appropriate to the potential loss, remembering that legal minimums may be low.
- Workers’ compensation or a verified exemption for the contractor and every subcontractor.
- Bond amount compared with the contract value.
- Recent, comparable references and at least one visitable finished or active job.
- Complaint and disciplinary patterns on the licensing board and BBB, considered separately from star reviews.
- Willingness to document permits, change orders, payment milestones, warranties, cleanup, and lien waivers.
The strongest candidate is the one whose identity, credentials, insurance, references, and contract terms all align—and who remains willing to prove those facts before receiving your money.
Frequently Asked Questions
Can a contractor use another company’s insurance certificate?
Only if the insured entity on the policy is actually responsible for your contract and the insurer confirms the arrangement. A certificate for a related company, owner, or former business name may leave your project outside coverage; require the contracting entity to appear as the named insured and verify any subcontractor separately.
What documents should I keep after the contractor passes the checks?
Keep the signed contract, every bid, change order, invoice, permit, certificate and endorsement, dated license and insurance lookups, reference notes, photos, and lien waivers. Record policy and license expiration dates so you can repeat the checks before large progress payments.
Does a low contractor bid mean the contractor is unlicensed?
Not necessarily, but a bid substantially below comparable written bids deserves an explanation. Compare allowances, exclusions, insurance, staffing, permit fees, schedule, and change-order terms line by line before treating the price as a bargain.
Do I need to verify a contractor’s subcontractors?
Yes. Ask for each subcontractor’s legal name, license where required, insurance, workers’ compensation proof or exemption, and responsibility for permits and cleanup. The prime contractor’s policy and license do not automatically cover an unverified subcontractor.
What should I do if the contractor’s license expires during my project?
Stop relying on the old record and contact the licensing agency before authorizing more work or payment. Obtain written confirmation of renewal or reinstatement, and re-check insurance because a policy cancellation can also suspend registration in states such as Washington.
