How to Check If a Contractor Is Licensed and Insured Before You Sign Anything

Not all states license general contractors at the state level. About half do. The rest leave it to cities and counties. According to Procore, states like Colorado, Illinois, Kansas, Missouri, and New Jersey do not require general contractors to hold statewide licenses ¹. Texas, one of the largest construction markets in the country, has no statewide general contractor license either ¹.

States that do require a license set a dollar threshold for when it kicks in. In California, all contractors working on projects valued at more than $500 require licenses ¹. Other states set the bar higher or lower. Florida requires a license for almost all contractor work ¹.

Even in states with no statewide license, trade specific work like electrical, plumbing, and HVAC almost always requires a state license. And local cities often have their own registration or permit requirements. If your state is not on a licensing board list, call your city or county building department.

Search your state name plus contractor license lookup. The official board site will usually be a .gov domain. In California, it is cslb.ca.gov. In Georgia, it is sos.ga.gov under the Licensing tab ³. In Louisiana, it is lslbc.gov.

Enter the contractor's license number. If you do not have it, search by business name or the contractor's personal name. Every legitimate contractor should be able to give you a license number on the spot. If they cannot, that is your answer.

Once you pull up the record, check five things: the license is active (not expired, suspended, or revoked), the license classification covers the type of work you need, the business name on the license matches the company you are hiring, the expiration date is after your expected project end date, and there are no unresolved complaints or disciplinary actions.

• Confirm the license status is active
• Verify the classification covers your project type (general building, residential, specialty)
• Match the business name on the license to the company giving you a bid
• Check the expiration date extends past your project timeline
• Review complaint and disciplinary history

A contractor bond is a financial guarantee filed with the state. If the contractor fails to perform or violates license law, the bond pays out to the consumer. In California, the bond must be in the amount of $25,000 ². The CSLB states that the bond is filed for the benefit of consumers who may be damaged as a result of defective construction or other license law violations, and for the benefit of employees who have not been paid wages that are due to them ².

Bond requirements vary by state. Some states require bonds only for certain license types. Others fold them into the license application so you never see a separate document. The license lookup in most states will show whether the contractor's bond is current.

A bond is not insurance. It does not cover property damage or injuries on the job. It covers specific regulatory violations and consumer claims up to the bond amount. On a large kitchen remodel, a bond may not cover the full loss if something goes seriously wrong. That is why insurance matters separately.

Ask the contractor for a Certificate of Insurance, also known as an ACORD 25 form ⁴. This is a one page document issued by the contractor's insurance company. It lists the coverage types, policy numbers, limits, and expiration dates. A real contractor will have this ready or can get it from their insurance provider within a day.

The two coverages that matter most for residential remodeling are general liability and workers compensation. General liability covers damage to your property and injuries to third parties caused by the contractor's work. Workers compensation covers the contractor's employees if they are injured on your job site. In California, if a contractor has employees, they are required to carry workers compensation insurance ⁵. Georgia law requires workers compensation if the business has three or more employees ³.

If a worker is injured on your property and the contractor does not have workers compensation insurance, you could be on the hook for medical bills. The CSLB warns that if a worker is injured working on your property and the contractor doesn't have insurance, you could be financially liable ⁵. This is not a scare tactic. It is how the law works in California and many other states.

The ACORD 25 form has standard fields. You do not need to be an insurance expert to read it ⁴. Here is what to check.

First, confirm the named insured matches the contractor's legal business name exactly. Not a nickname, not a parent company. Second, check the policy effective and expiration dates. If a policy expires before your project will be finished, ask for a renewal certificate before signing anything. Third, look at the coverage limits. For residential remodeling, one million per occurrence and two million aggregate on general liability is the standard. Fourth, verify that workers compensation is listed if the contractor has employees.

You can also ask the contractor to have you added as an additional insured on their general liability policy. This means if someone files a claim related to the work on your property, you have coverage under the contractor's policy. The certificate itself does not grant this coverage. The actual policy endorsement does ⁴. Ask the contractor's insurance provider to confirm the endorsement exists.

In states that require a license, hiring an unlicensed contractor creates real problems. You may lose access to the state complaint process and the contractor's bond. Your homeowner's insurance may not cover damage caused by unlicensed work. In some states, contracts with unlicensed contractors may be unenforceable, limiting your legal options if the work goes wrong.

In states with no statewide license, the contractor should still have a local business registration, general liability insurance, and workers compensation if they have employees. The Georgia Governor's Office of Consumer Protection notes that certain specialty occupations such as roofers, painters, drywall contractors, and repair handymen are not required to be licensed by the state ³. Even so, you should still ask any contractor for proof of general liability insurance before hiring them.

Ask anyway. A contractor who refuses to show a license, a bond, or a certificate of insurance is telling you something. Move on.

You get a bid from ABC Remodeling for a kitchen project. The salesperson hands you a card with license number 1234567. Here is how you verify it.

Go to cslb.ca.gov and click Check a License. Enter 1234567. The results page shows the license status (active or not), the license classification (B for general building, C for specialty), the business name, and the expiration date. Scroll down to see the bond status and workers compensation status. If the bond field shows a $25,000 contractor license bond on file and the workers compensation field shows active coverage, you have confirmed both ².

If the license comes back expired, suspended, or does not exist, do not hire that contractor. In California, by law, a contractor cannot ask for a down payment of more than 10% of the contract price on a home improvement project or $1,000, whichever is less ⁵. If an unlicensed contractor asks for more than that upfront, you have no bond and no board to complain to.

1. The Ultimate Guide to Contractor License Requirements in Every State, Procore
2. Bond Requirements, California Contractors State License Board
3. How Can I Verify That a Contractor Is Licensed and Insured?, Georgia Governor's Office of Consumer Protection
4. Contractor Certificate of Insurance (COI), Insureon
5. How Do I Find the Right Licensed Contractor?, California Contractors State License Board

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