How to Verify Licenses and Insurance
This step takes 30 minutes but can save you thousands of dollars and enormous headaches. An unlicensed or uninsured contractor puts you at legal and financial risk—even if their work is good.
Quick Summary
Time needed
30-60 minutes
Items to verify
License, Liability, Workers Comp
Why it matters
Legal protection
Why This Protects You
It's tempting to skip verification when a contractor seems professional and has good references. But licenses and insurance exist for when things go wrong—and things do go wrong.
Without a license, you risk:
- •Permits denied or work red-tagged
- •No recourse through state licensing board
- •Problems when selling your home
- •Potential fines for you as homeowner
Without insurance, you risk:
- •Paying for property damage out of pocket
- •Liability for worker injuries on your property
- •Homeowner's insurance claim denial
- •Lawsuits you have no coverage for
True story: A homeowner hired an uninsured contractor. A worker fell off a ladder and broke his back. The homeowner was sued for $400,000 in medical bills and lost wages. Their homeowner's insurance denied the claim because they knowingly hired an uninsured contractor.
Step 1: Verify Contractor License
What to Get From the Contractor
Request their contractor license number and the business name exactly as registered with the state.
License information to collect:
- •License number
- •License type (general contractor, specialty, etc.)
- •Business name as registered
- •Individual name on license (if sole proprietor)
How to Verify
Every state has a contractor licensing board with an online lookup tool.
When you search, confirm:
- ✓License is active — Not expired, suspended, or revoked
- ✓License type is appropriate — A general contractor or remodeling license for kitchen work
- ✓Business name matches — The contract should be with the licensed entity
- ✓No disciplinary actions — Check for complaints, fines, or suspensions
Find your state's board: Search "[your state] contractor license lookup" or visit your state's department of consumer affairs or professional regulation website.
What License Types Mean
General Contractor (GC):
Can manage entire projects and hire subcontractors. Best for full kitchen remodels.
Remodeling Contractor:
Specifically licensed for renovation work. Appropriate for kitchen remodels.
Specialty Licenses:
Electrical, plumbing, HVAC. Subs should have these. GC should verify them.
Handyman Exemption:
Many states allow unlicensed work under $500-1,000. Not applicable for kitchen remodels.
Step 2: Verify Insurance Coverage
General Liability Insurance
Covers damage to your property and injuries to you or visitors. This is essential protection.
What to verify:
- •Coverage amount: Minimum $1,000,000 per occurrence recommended
- •Policy dates: Must be active through entire project
- •Named insured: Should match the contractor's business name
Workers Compensation Insurance
Covers injuries to the contractor's employees. Without this, YOU could be liable for worker injuries on your property.
State requirements vary:
- •Most states require workers comp for any employees
- •Sole proprietors may be exempt but should still carry it
- •Coverage should extend to subcontractors used on your job
Critical: If a sole proprietor says they don't need workers comp because they have no employees, ask if they use subcontractors. If yes, those subs need coverage, or you're at risk.
How to Verify Insurance Is Real
Fake or expired certificates are common. Always verify directly.
Verification steps:
- 1.Request a Certificate of Insurance (COI)
- 2.Look up the insurance company's phone number on their official website—not the number on the certificate
- 3.Call and verify the policy number, coverage amounts, and effective dates
- 4.Ask to be listed as an "additional insured" for extra protection
Step 3: Check Bond (If Required)
Some states require contractors to post a surety bond. This provides a pool of money to compensate homeowners if the contractor fails to fulfill their contract.
About contractor bonds:
- •Bond amounts vary by state ($10,000-$25,000 typical)
- •You can file a claim if contractor abandons job or violates contract
- •Bond is separate from insurance—different protections
- •Verify bond through state licensing board
Note: Not all states require contractor bonds. Even if your state doesn't require one, insurance is still essential. Check your state's requirements.
Verification Checklist
License is active and in good standing
Verified on state licensing board website
No complaints or disciplinary actions
Checked licensing board complaint history
General liability insurance ($1M+ coverage)
Called insurance company to verify active policy
Workers compensation insurance
Verified coverage for employees and subcontractors
Bond verified (if required by state)
Confirmed current and meets minimum amount
Business name matches across all documents
License, insurance, and contract all consistent
Frequently Asked Questions
Why do I need to verify a contractor's license?
A valid license proves the contractor meets minimum competency standards, has passed exams, and is registered with your state. Unlicensed contractors can't pull permits, may do substandard work, and leave you with no recourse if problems arise. In many states, hiring an unlicensed contractor for work over a certain value is illegal.
What insurance should a contractor have?
Contractors should have general liability insurance ($1 million minimum recommended) and workers compensation insurance. General liability covers property damage and injuries to non-employees. Workers comp covers injuries to the contractor's employees. Without workers comp, YOU could be liable if a worker is injured on your property.
How do I verify a contractor's insurance is real?
Don't just look at the certificate—call the insurance company directly. Fake or expired certificates are common. Ask for a "Certificate of Insurance" naming you as the certificate holder, then verify by calling the phone number on the insurance company's official website (not the number on the certificate).
What happens if I hire an unlicensed contractor?
Hiring an unlicensed contractor puts you at significant risk: permits may be denied or revoked, you may have no legal recourse for disputes, your homeowner's insurance might not cover damages, and you could face fines. Some states void mechanics' liens for unlicensed contractors, meaning you might be able to sue for money back.
Ready for the Next Step?
With licenses and insurance verified, you're ready to review the contract in detail. Don't sign anything until you understand every clause and have negotiated any unfavorable terms.