A contractor can have excellent customer reviews, a professional website and an impressive portfolio. Those are all useful signs, but they don't replace verifying the company's credentials.
Before agreeing to a roofing replacement, kitchen remodel or other major home improvement project, make sure the contractor is authorized to perform the work and has appropriate insurance coverage.
These checks can help protect you from unexpected financial problems, disputes and work that fails to meet local requirements.
Here's how to do them.
1. Verify the Contractor's License With the Appropriate Government Agency
Start by asking the contractor for the exact business name and license number under which they plan to perform the work.
Then verify that information independently.
Licensing requirements vary across the United States. Some states require licenses for many types of construction work. Others regulate particular trades, such as electrical, plumbing or HVAC services, while certain requirements are handled locally.
A business license and a professional contractor's license are not necessarily the same thing.
Where to check
For California contractors, use the official Contractors State License Board License Check.
The lookup allows consumers to search by license number, business name or individual contractor and review available licensing information.
If you're outside California, start with your state's licensing board or contractor regulator. The National Association of State Contractors Licensing Agencies provides links to many state licensing agencies.
If your state doesn't license the particular type of work, contact your city or county building department to ask what requirements apply.
2. Make Sure the License Covers the Work You Need
Finding an active license is important, but you should also confirm that it is appropriate for your project.
Contractor licenses may be issued for particular classifications or trades.
For example, a company authorized to perform one type of construction work might not be licensed to carry out a different specialty.
When reviewing the official record, check:
- Whether the license is active and in good standing.
- Whether the license belongs to the company you're hiring.
- Whether its classification covers the work you need.
- Whether the record shows restrictions, disciplinary actions or other disclosures.
If the name on the proposal doesn't match the license record, ask why.
There may be a legitimate explanation, such as a registered trade name, but you should understand which legal business is responsible for the contract.
3. Ask for Proof of General Liability Insurance
General liability insurance can provide protection when covered accidents or property damage occur during a project.
For example, a contractor might damage your property while moving equipment or performing repairs.
Whether a particular claim is covered depends on the policy, its terms and applicable exclusions.
Ask the contractor for a current certificate of insurance that identifies the insurer, insured business and coverage information.
Then contact the listed insurance agent or carrier using independently confirmed contact information to verify that the policy is active and appropriate for the project.
Don't assume a certificate alone guarantees that a particular loss will be covered.
You may also want to ask whether your project requires additional insurance arrangements or documentation.
4. Check Workers' Compensation Coverage
Workers' compensation insurance generally addresses covered work-related injuries and illnesses involving employees.
Requirements vary by state and type of contractor.
This is important because an uninsured worker's injury can create serious legal and financial complications.
Some licensing agencies make workers' compensation information available through their public databases.
California has specific rules for certain contractor classifications. For example, active C-39 roofing contractors must carry workers' compensation insurance or valid self-insurance even when they have no employees.
You can review those requirements through the California Contractors State License Board.
Don't assume the same rule applies in every state.
If you can't verify coverage through an official record, ask the contractor for documentation and confirm it with the insurance provider.
5. Understand the Difference Between Insurance and a Contractor Bond
A contractor may tell you the business is licensed, bonded and insured.
Those terms describe different things.
Licensing addresses whether the business meets the applicable legal requirements to perform regulated work.
Insurance can provide coverage for particular losses, depending on the policy.
A contractor bond is generally a financial guarantee required in some jurisdictions to help address certain failures to meet legal or contractual obligations.
A bond is not a substitute for liability insurance, and neither guarantees that the finished work will meet your expectations.
Ask which protections apply to your project and verify the information where possible.
6. Check Complaint and Disciplinary Records
Customer reviews can provide valuable information about service quality. Official records may reveal different concerns.
Depending on the jurisdiction, licensing agencies may publish information about disciplinary actions, citations, complaints or restrictions.
Check the appropriate regulator's website for available disclosures.
A complaint does not automatically mean a contractor acted improperly. Some complaints are dismissed or resolved without disciplinary action.
Look at the details and the final outcome where available.
It can also help to check consumer protection resources and search for repeated patterns of unresolved customer problems.
The Federal Trade Commission's home improvement advice recommends checking credentials, reviewing customer feedback and obtaining multiple written estimates.
7. Ask About Experience With Your Specific Project
Even a properly licensed and insured contractor may not be the right choice for every job.
Someone who regularly installs asphalt shingle roofs might have limited experience with a complicated flat-roof system.
A remodeling company might handle kitchens every week but rarely perform major structural renovations.
Ask how often the company completes work similar to yours.
Request examples of recent projects and, when appropriate, references from customers with comparable needs.
Find out who will supervise the work and whether subcontractors will be involved.
These questions help you evaluate the contractor's experience beyond the legal minimum requirements.
8. Get Everything Important in Writing
Before you sign a contract, make sure you understand what you're buying.
A clear written estimate should identify the work, materials, expected schedule and price.
For a larger project, also discuss permits, payment schedules, cleanup, warranties and procedures for handling unexpected work.
If a contractor tells you something important during a conversation, ask to have it included in the written agreement.
Never sign documents with blank spaces for essential contract terms, and be cautious about demands for unusually large payments before work begins.
Deposit limits and other contract requirements vary by jurisdiction.
How ONE AllRatings Can Help
ONE AllRatings includes a Key Docs component in its company reports.
This provides information about applicable documentation that has been verified as part of OAR's rating process, along with customer ratings and other company details.
It's useful when you're comparing businesses, but it shouldn't be your only source of verification.
A company report showing 0% Key Docs does not necessarily mean the business lacks a license or insurance. Check the relevant government records and request current documentation directly.
You can research companies through OAR's service listings, including roofing contractors in Danville, California and plumbing contractors in Alameda County.
A Few Minutes of Research Can Make a Difference
Checking a license or insurance policy isn't complicated, but it's easy to skip when a company has good reviews or comes recommended by someone you trust.
Take the time to confirm the basic information before making a financial commitment.
Verify the license, check the insurance, review available complaint records and make sure the company has experience with your type of project.
Then compare the written proposals.
A company's reputation matters. Its legal qualifications and ability to complete your specific project matter just as much.