How To Verify A Contractor is Licensed and Insured?
Verify that a contractor near you is licensed and insured before you hire them and risk any loss. Mitigate your risk and protect your investment.
When you’re hiring a contractor for a project, it’s crucial to ensure they are both licensed and insured. This not only verifies their competence and professionalism but also provides a safety net for any potential damages or mishaps that might occur during the project. This article will walk you through the process of verifying a contractor’s license and insurance status, detailing each step to provide you with a comprehensive understanding.
What is a Licensed Contractor?
A licensed contractor is a professional who has met the specific requirements set by the state or local government to legally perform construction-related work. This process often involves passing exams to demonstrate competence in the trade, showing proof of financial solvency, and maintaining a certain level of bonding and insurance.
Why is Licensing Important?
Licensing is crucial because it signifies that a contractor is competent and knowledgeable about building codes and processes. Licensed contractors are more likely to deliver quality work, and they are also obligated to adhere to specific regulations that protect the consumer. Furthermore, many states offer recovery funds to homeowners who suffer financial losses due to the work of a licensed contractor.
What is an Insured Contractor?
An insured contractor carries insurance that can cover damages or injuries that might occur during the course of a project. These insurance policies can include general liability insurance, which covers property damage and bodily injury caused by the contractor’s work, and workers’ compensation insurance, which covers injuries to the contractor’s employees.
Why is Insurance Important?
Insurance is important because it protects both the homeowner and the contractor from potential financial loss. If a contractor damages your property or if an employee is injured on your property, insurance will cover the associated costs. Without insurance, you as the homeowner could be held liable for these costs.
How to Verify a Contractor’s License
Here’s a step-by-step guide on how to verify a contractor’s license:
- Ask the Contractor for Their License Number: The first step is to ask the contractor for their license number. Most reputable contractors will readily provide this information. If a contractor is hesitant to share their license number, consider it a red flag.
- Check with the Relevant Licensing Board: Each state has its own licensing board, and some cities or counties also have their own licensing requirements. Visit the relevant licensing board’s website, and enter the contractor’s license number in the provided search field. This should pull up information about the contractor, including the status of their license and any complaints or disciplinary actions on their record.
- Check the Type and Validity of the License: Make sure that the contractor’s license is the right type for the work they will be doing. For example, a plumber should have a plumbing contractor’s license. Also, confirm that the license is current and not expired.
- Check for Any Complaints or Disciplinary Actions: While you’re checking the license, also take a look at any complaints or disciplinary actions. These could indicate problems with the contractor’s work or business practices.
How to Verify a Contractor’s Insurance
Verifying a contractor’s insurance is just as important as checking their license. Here’s how to do it:
- Ask the Contractor for Proof of Insurance: Request proof of insurance from the contractor. They should be able to provide you with a Certificate of Insurance that details their coverage, including the type and amount of coverage, the insurance provider, and the policy’s expiration date.
- Contact the Insurance Company: To ensure the document’s authenticity, contact the insurance company directly and verify the policy. Insurance fraud is a significant concern, and some dishonest contractors might attempt to provide fake insurance certificates.
- Check the Type and Amount of Coverage: Ensure the contractor has both general liability insurance and workers’compensation insurance. General liability insurance covers any damage that might occur to your property during the course of the project. Workers’ compensation insurance covers any injuries that might occur to the contractor’s employees while on your property. The minimum amount of coverage will vary by state and by the scope and nature of the project, but a general rule of thumb is that a contractor should have at least $1 million in general liability coverage.
- Check the Policy’s Expiration Date: Finally, check the policy’s expiration date to make sure the coverage will be in effect throughout the duration of your project. If the policy is due to expire soon, ask the contractor what arrangements they have made to renew it.
Here are some additional tips to keep in mind when verifying a contractor’s license and insurance:
- Get Everything in Writing: Always get a written agreement that includes the contractor’s license number and details about the insurance coverage. This agreement should also detail the scope of the project, the cost, and the expected timeline.
- Beware of Low Bids: While it might be tempting to go with a contractor who offers a significantly lower bid than others, this could be a red flag. It could mean the contractor is cutting corners somewhere, potentially by not being properly licensed or insured.
- Check References: In addition to verifying licensing and insurance, it’s also a good idea to check references. Ask the contractor for contact information of previous clients and get in touch with them. Ask about their experience with the contractor and if they were satisfied with the work.
- Trust Your Instincts: If something doesn’t feel right, trust your instincts. Even if a contractor is properly licensed and insured, they might not be the right fit for your project.
Hiring a contractor is a significant decision that should not be taken lightly. Verifying a contractor’s license and insurance status is a crucial part of the hiring process. It not only provides peace of mind, but also protects you from potential financial and legal liabilities. By following the detailed steps provided in this guide, you can ensure you’re hiring a reputable, professional contractor who will deliver quality work. Remember, a well-informed homeowner is the best defense against poor workmanship and dishonest contractors.
State by State – How to Know if a Contractor is Licensed and Insured in your State
Below are just a few examples of states and information on how to determine if your contractor is properly licensed and insured.
How to Know if a Contractor in Texas is Licensed and Insured
Verifying a Contractor’s License in Texas
- Request the Contractor’s License Number: The first step is to ask the contractor for their license number. If they are a legitimate, professional contractor, they should readily provide this information.
- Check with the Texas Department of Licensing and Regulation (TDLR): The Texas Department of Licensing and Regulation (TDLR) is the state agency responsible for issuing and maintaining professional licenses, including those for contractors. Visit the TDLR’s official website (https://www.tdlr.texas.gov/) and navigate to the “License Data Search” page.
- Enter the License Number: Input the contractor’s license number into the search field. If the license number is valid, the search results will show the contractor’s name, business address, license type, license status, and expiration date.
- Review the License Information: Make sure the license is active and is the correct type for the work you need done. For example, a contractor performing air conditioning and refrigeration work should have an “Air Conditioning and Refrigeration Contractor” license.
Verifying a Contractor’s Insurance in Texas
- Ask the Contractor for Proof of Insurance: Request proof of insurance from the contractor. They should be able to provide a Certificate of Insurance that provides details about their coverage.
- Check the Details of the Insurance: The Certificate of Insurance should include the name of the insurance provider, the policy number, the type and amount of coverage, and the policy’s effective and expiration dates. Make sure the contractor has both general liability insurance and workers’ compensation insurance.
- Contact the Insurance Company: Contact the insurance company directly to verify the information on the Certificate of Insurance. This step is crucial to ensure the contractor’s insurance is valid and that the coverage amounts are sufficient for your project.
In addition to checking licensing and insurance, consider the following:
- Written Contract: Always insist on a written contract that includes the contractor’s license number and proof of insurance. The contract should also detail the project scope, cost, and timeline.
- Check References: Ask the contractor for references from previous clients, particularly those who had similar projects. Contact these references to learn about their experiences with the contractor.
- Beware of Unusually Low Bids: If a contractor’s bid is significantly lower than others, it could be a sign they are cutting corners, possibly by not being properly licensed or insured.
- Trust Your Instincts: If something seems off or too good to be true, it’s okay to walk away and find a different contractor.
How to Know if a Contractor in California is Licensed and Insured
To verify if a contractor is licensed and insured in California, you can follow these steps:
- Check for a License Number: Ask the contractor for their license number. They should provide this willingly. If not, it could be a red flag.
- Verify the License with the CSLB: Go to the Contractors State License Board (CSLB) website. They have an online tool called “Check a License” where you can verify the license number. The website is www.cslb.ca.gov. The CSLB licenses contractors in 44 different classifications. This tool will provide information about the contractor, such as when their license was issued and if it is currently active, as well as any disciplinary actions on their record.
- Check for Workers’ Compensation Insurance: If the contractor has employees, they are required by California law to have workers’ compensation insurance. This information should also be available on the CSLB website when you check the license.
- Ask for Proof of Liability Insurance: Besides workers’ compensation insurance, a contractor should also have liability insurance. Ask them for a Certificate of Insurance (COI), which shows that they carry general liability insurance. This insurance protects your property in case it’s damaged by the contractor or their employees.
- Bonding: California also requires licensed contractors to have a surety bond, which can provide compensation in the event of a financial loss due to a contractor’s work. This information can also be checked via the CSLB website.
- References and Reviews: It’s always a good idea to ask for references and check online reviews. This is not directly related to licensing or insurance, but it can give you an idea of the contractor’s reputation and quality of work.
How to Know if a Contractor in Florida is Licensed and Insured
In the state of Florida, it’s important to ensure that a contractor is both licensed and insured before hiring them for a job. Here’s how to do that:
Verify a Contractor’s License:
- Use the Online Search: The Florida Department of Business & Professional Regulation (DBPR) maintains an online license search. You can visit their website and select the “Verify a License” option. You can search by name, license number, city or county, or license type.
- Ask for the License Number: If you’re in direct contact with the contractor, you can ask them for their license number. A reputable contractor should have no problem providing this information. Once you have their license number, you can use it to search on the DBPR website mentioned above.
- Check for a Physical License: In Florida, licensed contractors are required to have their license number on all advertisements, including on their business cards and vehicles. If you don’t see a license number, it’s a red flag.
Verify a Contractor’s Insurance:
- Ask for Proof of Insurance: A reputable contractor should be able to provide you with proof of insurance. This typically comes in the form of a Certificate of Insurance.
- Check the Insurance Certificate: Once you have the Certificate of Insurance, you can verify its authenticity by calling the insurance company listed on the document. Make sure the policy is current and covers the type of work you’re hiring the contractor to do.
How to Know if a Contractor in New York is Licensed and Insured
In order to verify if a contractor in New York is licensed and insured, you should take the following steps:
- Ask for Proof: Ask the contractor to show their license and proof of insurance. They should be able to provide you with a copy of their state license and their insurance certificate.
- Check the License Number: Once you have the contractor’s license number, you can verify it. In New York, you would check with the Department of Consumer Affairs (DCA). You can verify the contractor’s license number online on the DCA’s website, which has a license check tool. Note that licensing may vary by county or city, so you might need to check with local licensing authorities.
- Insurance Verification: For insurance, if you have the name of the insurance company and policy number, you can contact the insurance company directly to confirm that the policy is active and that it covers the type of work the contractor will be doing. The contractor should have both liability insurance and workers’ compensation insurance.
- Check for Complaints and Violations: While you’re on the DCA’s website, you can also check to see if there have been any complaints or violations filed against the contractor.
- References and Reviews: In addition to checking licensing and insurance, it’s also a good idea to ask for references from previous clients and to read reviews of the contractor’s work. This can give you a better idea of the contractor’s reliability and quality of work.
How to Know if a Contractor in Pennsylvania is Licensed and Insured
Pennsylvania does not require general contractors to have a state license. However, specific trades such as electricians or plumbers might have licensing requirements. It’s also worth noting that some local jurisdictions within Pennsylvania may require licensing for contractors. Here are steps you can take to verify a contractor’s qualifications:
- Ask the Contractor for Proof: The simplest way to know if a contractor is licensed and insured is to ask them directly. A reputable contractor should have no problem providing you with this information. Ask to see copies of their insurance certificate and any licenses they may hold.
- Contact the Insurance Company: The contractor’s proof of insurance should include the name of their insurance company. You can contact the insurance company directly to confirm that the contractor’s policy is active and in good standing.
- Check Local Licensing: If the contractor says they’re licensed, you’ll want to verify this with the licensing authority in your local jurisdiction. This might be a city or county agency. You can typically check license status online or by calling the agency directly.
- Pennsylvania Attorney General’s Office: You can also verify a contractor’s registration with the Pennsylvania Attorney General’s Office. This is not a licensing body, but the Home Improvement Consumer Protection Act requires contractors to register with the Attorney General’s office. You can search for registered contractors on the Attorney General’s website.
How to Know if a Contractor in Illinois is Licensed and Insured
Hiring a contractor involves several steps of research and verification to ensure that you’re working with a licensed and insured professional. In Illinois, the process of verifying a contractor’s license and insurance status can vary depending on the type of contractor and the specific locality, as not all types of contractors are required to have a state license.
Here are some general steps to follow:
- Ask the Contractor Directly: The first and simplest step is to ask the contractor directly. A reputable contractor should be able to provide proof of their license and insurance coverage. This may come in the form of a certificate or policy number.
- Check with Local Municipality or County: As Illinois does not have a statewide general contractor license, many contractors are licensed at the local level. You can contact your local city or county office to verify if the contractor is licensed in your area.
- Verify the Contractor’s Insurance: Ask the contractor for the name of their insurance company and policy number. You can then contact the insurance company directly to verify coverage. Make sure that they have both liability insurance and workers’ compensation insurance.
- Check the Illinois Department of Financial and Professional Regulation (IDFPR): Some specific types of contractors, like roofing contractors, are licensed by the state. You can verify state licenses on the IDFPR website.
- Look for Complaints or Reviews: Check online review platforms and the Better Business Bureau to see if there are any complaints or issues related to the contractor’s work. While this won’t confirm license or insurance information, it can provide useful context about the contractor’s reliability and professionalism.
- Get Everything in Writing: Once you have verified a contractor’s license and insurance, make sure to get all details of the work to be performed in a written contract. This should include the contractor’s license number and insurance details.
How to Know if a Contractor in Ohio is Licensed and Insured
Here’s a general process you can follow to verify if a contractor in Ohio is licensed and insured:
- Request Information from the Contractor: The first step is to ask the contractor directly. A reputable contractor should willingly provide you with their license number and proof of insurance.
- Check the Ohio Secretary of State’s Business Search: Visit the Ohio Secretary of State’s Business Search webpage to verify the business name of the contractor. You can enter the name of the contractor in the search box to see if they are registered.Website: https://businesssearch.ohiosos.gov/
- Check with Ohio’s Construction Industry Licensing Board (CILB): Ohio’s CILB licenses commercial contractors for particular trades. Not all work requires a state-level license (it often depends on local county or city regulations), but for work that does—like HVAC, electrical, and plumbing—visit the CILB’s license lookup tool to verify a contractor’s license.Website: http://elicense1.com.ohio.gov/Search/PersonSearchPlease note, Ohio does not have a state general contractor license. General contractors are licensed on the local (city or county) level.
- Verify Insurance: Ask for a copy of their insurance certificate. Call the insurance company to make sure the policy is current. The insurance should include workers’ compensation to cover any injuries that occur on the job, liability insurance in case they damage your property, and a surety bond to protect you in case the contractor doesn’t complete the job as agreed.
- Local Licensing: As mentioned above, general contractors might be licensed at the local level. You can verify this by contacting your local (county or city) government offices, which should have a method in place to check for locally licensed contractors.
- Reviews and References: Don’t forget to look for reviews of the contractor online or ask the contractor for references. Past customers can provide valuable information about a contractor’s reliability and quality of work.
How to Know if a Contractor in Georgia is Licensed and Insured
In the U.S., it’s crucial to verify that a contractor is licensed and insured before hiring them for a job. Here’s how you can do that in the state of Georgia:
Check for a License:
- Georgia Secretary of State Professional Licensing Boards Division: This is the government body responsible for issuing and regulating professional licenses. You can check a contractor’s license status by visiting the Georgia Secretary of State website.
- Once on the website, navigate to the “License Verification” section. Here, you can enter the name or license number of the contractor. If the contractor is licensed, their information will show up.
Check for Insurance:
- Ask for Proof: The simplest way to confirm if a contractor is insured is by asking them directly. A reputable contractor should be able to provide a Certificate of Insurance (COI) that verifies they have both General Liability Insurance and Workers’ Compensation Insurance.
- Verify with the Insurance Company: If the contractor provides you with a COI, call the insurance company listed on the certificate to confirm the policy is current and valid.
How to Know if a Contractor in North Carolina is Licensed and Insured
In North Carolina, it’s important to verify the licensing and insurance status of a contractor before hiring them for a project. Here are the steps you should follow to do so:
- Verify the Contractor’s License:
- You can verify a contractor’s license through the North Carolina Licensing Board for General Contractors. Visit the board’s website at https://nclbgc.org. There, you’ll find a “License Search” feature where you can input the contractor’s name or license number to see their status.
- Be sure to check that the contractor’s license covers the type of work that you need done. In North Carolina, there are different classes of licenses (Limited, Intermediate, Unlimited) and specialties (Building, Residential, Highway, Public Utilities, etc.).
- Verify the Contractor’s Insurance:
- Ask the contractor to provide proof of insurance. This should include both liability and workers’ compensation insurance. Liability insurance protects against damage to your property, while workers’ compensation insurance covers injuries to the contractor’s employees while on your property.
- Don’t just take their word for it. Contact the insurance company directly to verify the coverage. Make sure the policy is current and has sufficient coverage for your project.
- Additional Due Diligence:
- Besides checking license and insurance, also consider checking references, reading reviews, and verifying the contractor’s business address and contact information. This can help you gauge the contractor’s reputation and reliability.
- Be wary of contractors who ask for full payment upfront or who do not provide a written contract.
How to Know if a Contractor in Michigan is Licensed and Insured
In the state of Michigan, it’s important to verify that a contractor is both licensed and insured to ensure quality work and protect yourself from any liabilities or legal issues that may arise during a project. Here’s how you can do that:
- Verify the Contractor’s License:The Michigan Department of Licensing and Regulatory Affairs (LARA) manages a database where you can verify a contractor’s license status. You can find this database on their website (www.michigan.gov/lara).To verify a contractor’s license:
- Visit the LARA website.
- Click on the “License Search” or similar button.
- Select the appropriate license type (such as “Residential Builder” or “Maintenance & Alteration Contractor”).
- Enter the contractor’s name or their license number in the search bar.
- Click on “Search” and look at the results. If the contractor is licensed, their license status should come up.
- Verify the Contractor’s Insurance:For insurance, you can ask the contractor directly. They should be able to provide you with a Certificate of Insurance that shows they carry both liability insurance and workers’ compensation insurance.
- Liability insurance covers any damages to your property caused by the contractor.
- Workers’ compensation insurance covers any injuries that may occur to the contractor’s employees while working on your property.
Once you have the Certificate of Insurance, you can contact the insurance company listed to confirm that the policy is current and valid.
All Other States
There is not a single, universal website that can be used to verify the licensing and insurance status of contractors in all 50 states. This is because licensing is often handled at the state level, and each state has its own procedures and databases for contractor licensing.
However, the National Association of State Contractors Licensing Agencies (NASCLA) is a resource that provides links to many state licensing boards. You can visit the NASCLA’s website (https://www.nascla.org/) and look for the link that says “State Licensing Agencies” to find contact information for each state’s relevant agency.
Here’s a general approach you can use to verify a contractor’s license and insurance status:
- Visit your state’s contractor licensing website or the NASCLA website. If you’re unsure of the website, a quick web search with the name of your state and “contractor licensing board” should help you find it.
- Use the search function on the state licensing website. Most state licensing websites have a search function where you can enter the contractor’s name or license number.
- Check for the contractor’s insurance. Some state licensing websites will also provide information about the contractor’s insurance. If not, you may need to contact the licensing board directly to ask about this.
- Contact the contractor’s insurance company. If you have the contractor’s insurance information, you can also contact the insurance company directly to verify that the policy is current and valid.
Remember that requirements can vary from state to state. Some states may not require certain types of contractors to be licensed at all, while others have strict licensing requirements for all contractors.
Insurance is also important. At a minimum, contractors should have liability insurance to cover any damages they might cause while working on your property, and they should have workers’ compensation insurance to cover any injuries to their workers.
Please check with your state’s specific resources for the most accurate and up-to-date information. Regulations and resources may have changed since our last update in May 2023.