Every state except a handful requires contractors to hold a license for jobs above a certain dollar amount, and that license number should appear on every contract, estimate, and business card they hand you. If it doesn’t, ask for it before any other conversation happens. A license number is the starting point for checking everything else, because the same name and number should match up across the license board, the insurance certificate, and the bond.
Start With the License Number, Not the Business Card
Take the license number straight to your state’s contractor licensing board website. Most states run a searchable database: California’s is run by the Contractors State License Board (CSLB), Florida’s by the Department of Business and Professional Regulation (DBPR), and so on. Type in the number and check three things: status (active, not expired or revoked), the license classification (does it match the work being done, like “general building” versus “electrical”), and any disciplinary history or complaints on file.
Pay attention to dollar thresholds. In California, for example, any job over $500 including labor and materials legally requires a licensed contractor. In states without a statewide general contractor license, like Texas, licensing may be handled at the city or county level instead, so check with your local building department rather than assuming no license is required at all.
If the name on the license doesn’t match the business name on the estimate, ask why. Sometimes it’s a legitimate DBA (doing business as) filing, and sometimes it’s a sign the person quoting you isn’t the one actually licensed.
Confirm General Liability and Workers’ Compensation Insurance
Ask for a certificate of insurance (COI) directly from the contractor, not a photo of an old document. A real COI lists the insurance carrier, policy number, coverage limits, and expiration date. General liability coverage for residential contractors typically runs between $500,000 and $2 million; anything lower on a project involving structural work or a large budget should raise questions.
Don’t stop at reading the paper. Call the insurance agent or company listed on the certificate and confirm the policy is active and matches the contractor’s business name. Certificates can be outdated, cancelled, or altered, and a five-minute phone call catches that. While you’re on the phone, ask to be added as an “additional insured” for the duration of the project. This is a standard request that protects you if a lawsuit arises from an accident on your property.
Workers’ compensation insurance matters just as much, especially for larger crews. If a worker gets hurt on your property and the contractor has no workers’ comp coverage, you as the homeowner can be held financially responsible for medical costs. Some states exempt owner-operators with no employees from carrying workers’ comp, so ask directly how many people will be on the job and whether all of them are covered.
Check the Surety Bond
A license bond is different from insurance. Insurance protects against accidents and property damage; a bond protects you financially if the contractor violates licensing law, abandons a job, or fails to pay subcontractors and suppliers. Bond amounts required by states typically fall between $10,000 and $25,000, though some states set them by contractor classification or project size.
Ask for the bond number and the name of the surety company, then call that company directly to confirm the bond is active. Ask two specific questions: whether any claims have already been filed against the bond, and how much of the bond amount is still available. A bond with existing claims against it may already be maxed out, which means it won’t help you if something goes wrong on your project.
Cross-Check Everything Against the Same Business Name
License, insurance, and bond should all list the same legal business name or a documented DBA. If the contractor operates under an LLC, ask for the LLC’s registration with the secretary of state to confirm it’s active and in good standing.
- Check the Better Business Bureau and your state attorney general’s office for filed complaints.
- Call your local building department and ask if this contractor has pulled permits recently under the name given to you.
- Search the contractor’s name plus “lawsuit” or “complaint” alongside your city name for local news coverage or civil court records.
Permit history is a useful check most homeowners skip. A contractor who’s pulled permits for similar jobs in your city over the past year or two has a track record you can trace, and building departments will usually tell you if that contractor has had projects red-tagged or stopped for code violations.
What to Do When Something Doesn’t Match
If the license is expired, ask the contractor directly and give them a chance to explain (renewals sometimes lag by a few weeks). If the insurance company can’t confirm the policy, or the bond has been cancelled, that’s a firm stopping point, not a detail to overlook. Get the discrepancy resolved in writing before signing anything or paying a deposit.
A contractor with legitimate credentials will not be bothered by these calls. Most licensed, insured, and bonded contractors expect homeowners to verify their information and can walk you through the process themselves, sometimes even providing the phone numbers for their insurance agent and surety company upfront.
Before you request a single quote, pull up your state’s contractor license lookup tool and bookmark it, then write down the phone number for your state’s contractor licensing board. Use both the next time a contractor hands you a business card, and do it before the conversation moves to scheduling or price.
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