You found a contractor whose work looks great and whose price feels fair. Before you sign anything, there’s a fifteen-minute step that separates a smooth project from a nightmare: confirming they’re actually licensed and insured. It’s the single most reliable way to weed out the operators who cut corners or disappear with your deposit.
Plenty of homeowners assume a confident pitch and a logo on a truck mean a business is legitimate. It doesn’t. Here’s exactly how to check a contractor out, what documents to ask for, and where the verification trail tends to go cold.
Quick Answer
To verify a contractor, confirm their license is active on your state licensing board’s website, get a current Certificate of Insurance showing general liability and workers’ compensation and call the insurer to confirm it’s active, check for complaints with the Better Business Bureau and your state records, and call references yourself. Do all of this before you sign a contract or pay a deposit. Licensing rules vary by state, so check whether your state licenses contractors directly or leaves it to the city or county.
Why licensing and insurance matter
A license tells you a contractor has met your state’s requirements to do the work legally, and it gives you somewhere to file a complaint if things go wrong. Insurance protects your wallet: if a worker is hurt on your property or your home is damaged during the job, the contractor’s coverage, not your homeowners policy, should pay for it. Skip the check and you can end up liable for an injury in your own house or stuck with shoddy work and no recourse.
What is a Certificate of Insurance (COI)?
A Certificate of Insurance is a one-page summary from the contractor’s insurer that lists their active policies, coverage limits, and dates. A legitimate contractor can produce one quickly. The two coverages that matter most for homeowners are general liability (covers property damage and injuries tied to the work) and workers’ compensation (covers the contractor’s employees if they’re injured on your property). A photo of an old certificate isn’t enough, because policies lapse, so you want a current one.
Licensed vs. bonded vs. insured
These three get used interchangeably, but they’re not the same. Licensed means the contractor met state or local requirements to operate. Bonded means a surety bond is in place that can compensate you if the contractor fails to complete the job or violates the contract. Insured means they carry liability and workers’ comp coverage. A trustworthy contractor on a significant project is usually all three.
How to verify a contractor, step by step
1. Get the full legal business name and license number
Ask for the exact business name and the contractor’s license number up front. A reluctance to share either is itself a warning sign. Write them down, because you’ll use both to search official records.
2. Check the license on your state board
Go to your state licensing board’s website and search by name or license number to confirm the license is active and in good standing, with no suspensions. Your county or city building department can confirm what’s required locally. Not everything is online, so don’t hesitate to call the board directly.
3. Verify the insurance with a current COI
Ask for a Certificate of Insurance showing general liability and workers’ compensation, then take the step most people skip: call the insurance company listed and confirm the policy is active and the limits are real. A fraudulent or lapsed certificate looks identical to a valid one until you make that call.
4. Confirm bonding where it applies
For larger projects, or in states that require it, ask whether the contractor is bonded and get the bond details. A surety bond gives you a path to recover money if the work is abandoned or breaches the contract.
5. Search for complaints and disciplinary history
Look the company up with the Better Business Bureau and search your state licensing records for disciplinary actions. One unhappy review isn’t damning, but a pattern of complaints, license suspensions, or unresolved disputes is a real signal.
6. Call references and read reviews critically
Ask for references from recent jobs and actually call them. Ask whether the work finished on time and on budget, and whether they’d hire the contractor again. Online reviews help too, but be wary of a profile where every review reads the same or they all landed in the same week.
Licensing rules vary a lot by state
Where you live changes what “licensed” even means, so check your own state’s system rather than assuming. California licenses contractors statewide through the Contractors State License Board (CSLB), and Arizona does the same through its Registrar of Contractors (ROC). Florida licenses many trades through the Department of Business and Professional Regulation, with some contractors state-certified and others registered to work in specific areas. Texas, notably, has no statewide license for general contractors, though trades like electrical, plumbing, and HVAC are licensed at the state level. New York largely leaves contractor licensing to cities and counties, so a contractor in one town may answer to different rules than one a few miles away. When in doubt, your local building department is the fastest way to learn what your area requires.
A quick real-world example
Say a hailstorm rolls through and a roofer knocks the next morning offering to start right away. The pitch is good, the price seems reasonable, and they want a deposit to “hold your spot.” Fifteen minutes of checking — confirming the license on the state board, calling the insurer to verify the policy, and searching for complaints — is what stands between you and handing a deposit to someone who may not even be licensed to pull a permit. The honest roofer will still be available after you’ve done your homework. The one pressuring you to skip it is telling you something.
Mistakes that leave homeowners exposed
- Accepting a photo of a certificate instead of calling the insurer to confirm it’s active.
- Assuming “licensed” means “insured.” They’re separate, so verify both.
- Skipping the check because the contractor came recommended. A referral is a great start, not a substitute for verification.
- Paying a deposit before the license and insurance are confirmed.
- Not checking local rules in states where licensing is handled by the city or county.
Frequently asked questions
How do I check if a contractor is licensed?
Search your state licensing board’s website by the contractor’s name or license number to confirm the license is active and in good standing. In states that license at the local level, check with your city or county building department. If you can’t find a record online, call the board directly.
What insurance should a contractor have?
At minimum, general liability (for property damage and injuries connected to the work) and workers’ compensation (for the contractor’s employees). Ask for a current Certificate of Insurance and confirm the policies are active by calling the insurer.
What’s the difference between bonded and insured?
Bonded means a surety bond can compensate you if the contractor fails to finish the job or breaches the contract. Insured means they carry liability and workers’ comp coverage. They protect you against different problems, which is why larger projects often call for both.
Do all states require a contractor license?
No. Some states license contractors statewide, some license only specific trades, and others leave it to cities and counties. Texas, for example, has no statewide general-contractor license, while California and Arizona license statewide. Always check your own state and local rules.
What if a contractor won’t show proof of license or insurance?
Treat it as a deal-breaker. A legitimate contractor expects the question and can answer it quickly. Refusal, stalling, or excuses are among the clearest signs to walk away.
The bottom line
Verifying a contractor is the cheapest insurance you’ll ever buy: a few phone calls and a couple of website searches before any money changes hands. Confirm the license, get and verify a current Certificate of Insurance, check for complaints, and call references. The professionals worth hiring make this easy. For a fuller picture of the warning signs to watch for, read our guide to contractor scam red flags.
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