How to Check If a Contractor Is Actually Licensed and Insured (and Why the COI Matters)
By Vinay S · Updated October 13, 2026
Look the contractor up on your state’s contractor licensing board, then ask for a certificate of insurance and call the insurance agent yourself to confirm it. That is the whole process. It takes under an hour, and it is the part of hiring most homeowners skip, even though the Federal Trade Commission advises considering only contractors who are both licensed and insured.
A license tells you the state recognizes the contractor to do that kind of work. The insurance tells you who pays if something goes wrong on your property. They are different documents, and you want both.
Step 1: Check the license
Every state does this differently. Some license general contractors statewide, some leave trades like roofing or painting to cities and counties, and a few have little licensing at all. The FTC’s advice is simple: confirm the license with your state or county government. Search for the name of your state plus “contractor license lookup” and make sure the web address ends in .gov.
California’s Contractors State License Board is a useful example of what a good record shows, and SiteVetter’s guide walks through it. You can search by license number, business name or personnel name. The record lists:
- License status: Active, Inactive, Expired, Suspended or Revoked
- License classifications
- Business entity information
- Workers’ comp status
- Bond information
- Disciplinary actions
Take these checks in order:
- Is the status Active? Anything else means stop.
- Does the name on the license match the name on the quote and the contract? A company that bids as one business and holds a license as another is a red flag.
- Does the classification cover your job? SiteVetter notes a general building license (B) does not authorize electrical work without a C-10. Other classes it names are C-8 (concrete), C-20 (HVAC), C-36 (plumbing) and C-39 (roofing).
- Is there a bond? California requires a $25,000 contractor bond, and LLCs must also post an additional $100,000 employee worker bond.
- Are there complaints or disciplinary actions? Read them.
SiteVetter also reports that California requires a license for work valued at $500 or more, raised to $1,000 for certain projects in January 2025, and that penalties for unlicensed work include up to six months in jail and fines up to $5,000. Your state will have its own thresholds and penalties, so treat these as an example of how serious the rules can be and not as a rule for where you live.
A note on terms. A business license from your city or county is usually a tax registration. It says the company exists and pays its fees. A trade or contractor license says the person passed whatever the state requires for that kind of work. Ask for the second one.
Step 2: Ask for the certificate of insurance
A certificate of insurance, or COI, is a one-page summary an insurance agent produces on request. The standard form is the ACORD 25, and a contractor should be able to send one the same day. SiteVetter’s field-by-field guide covers what to read.
| Field | What to check |
|---|---|
| Producer | A real agency with a phone number and a business email. A missing phone number or a Gmail address is a warning sign. |
| Named insured | Must match the contractor’s legal name exactly. “Inc.” and “LLC” versions are different entities. |
| Insurers | Each carrier has a letter and a five-digit NAIC number. Check the A.M. Best rating (A- or better is the usual standard) and that the carrier is licensed in your state. |
| Coverages and limits | General liability, workers’ comp with employer’s liability, auto and umbrella, each with policy numbers, dates and limits. |
| Description of operations | Should mention your project address and additional insured status. It describes coverage but does not create it. |
| Certificate holder | That is you. It gives you notice rights at most, not coverage. |
The general liability policy is the one that matters most to you, because it responds when the work damages your property or injures a third party. Workers’ comp covers the contractor’s own employees. Auto covers the truck. The form lists them on separate lines, so a contractor who proves vehicle insurance has told you nothing about your house.
What the limits mean
SiteVetter gives $1 million per occurrence and $2 million aggregate as the standard minimum for general liability. It treats an umbrella policy as optional for residential projects under $1 million and suggests an extra $1 million to $2 million of umbrella cover for high-risk trades such as roofing. That guide is written for general contractors vetting subcontractors, so use it as a yardstick and ask your own agent what fits your project.
Why the COI matters: being a certificate holder is not enough
This is the part most people miss. Holding the certificate is not the same as being covered.
- Certificate holder: SiteVetter says this gives you notice rights at most. You have no coverage and cannot make a claim on the contractor’s policy.
- Additional insured: This is actual coverage. The contractor’s insurer defends you and pays covered claims.
Two endorsements matter for additional insured status. CG 20 10 covers ongoing operations. CG 20 37 covers completed operations, which is the one that responds if a roof leaks two years after the job. Without it, SiteVetter notes, a claim from a roof leak two years later lands on your own policy. For a large project, ask for the endorsement pages themselves and not just the box ticked on the certificate.
Also ask for notice if the policy is cancelled. The ACORD form itself creates no duty to tell you. A Notice of Cancellation endorsement naming you does.
Step 3: Verify it with a phone call
A COI is a snapshot, not proof. It can be out of date, incomplete or edited. Do these three things.
- Find the agent’s phone number yourself, from the carrier’s website or a web search. Do not use the number printed on the certificate.
- Ask the agent to confirm that the policy is in force, the dates and the limits.
- Check that the policy dates cover your entire project.
Here is a quick arithmetic check. Say work starts March 1 and runs six weeks. Six weeks is 42 days, so it ends April 12. If the general liability policy expires March 31, the final 12 days of the job (April 1 through April 12) are uncovered unless it is renewed. Ask the contractor to send the renewal certificate before the expiry date.
SiteVetter’s red flags for a forged certificate: inconsistent fonts or misaligned boxes, an editable PDF with a Clear Form button, all-numeric or sequential policy numbers, an occurrence limit higher than the aggregate, a certificate dated more than 30 days ago, or policy dates that begin the same day you asked for it.
What to do with the answers
| Result | What it means | Next step |
|---|---|---|
| License active, COI confirmed by agent | You are in good shape | Put the license number in the contract |
| License active, no COI | Coverage unknown | Do not start work until you have one |
| COI looks fine, agent does not confirm | Possible lapse or forgery | Walk away |
| No license where one is required | Legal and financial risk | Walk away |
| Workers’ comp exemption on file | Contractor says no employees | Make sure no one else will be working on your job |
California does not allow workers’ comp exemptions for several trades, including concrete, HVAC and roofing, according to SiteVetter. Other states differ, so check with your state’s workers’ comp agency if a contractor says they are exempt.
Do not forget the contract. The FTC says a written agreement should include the contractor’s name, address, phone number and license number, start and completion dates, and every promise made about scope and cost. It also warns against paying the whole amount up front and recommends that you not make the final payment until the work is done and you are satisfied.
How to decide what to do next
- Before you collect quotes, ask each contractor for a license number and a COI.
- Look up the license yourself. Do not rely on a number printed on a truck.
- Confirm the COI with the agent by phone.
- Ask for additional insured status on the project, and ask for the completed operations endorsement if it is a large job.
- Write the license number and insurance requirements into the contract.
- Benchmark the price. A licensed, insured contractor costs more than someone without those, so compare quotes against a realistic range with tools like the Roofing Cost Calculator, the Deck Cost Calculator or the Home Addition Cost Calculator.
Hiring someone with no license and no insurance may save money on paper. It puts the risk of a mistake, an injury or a vanished deposit on you.
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Frequently asked questions
How do I check if a contractor's license is valid?
Search your state's contractor licensing board website by license number, business name or owner's name. The record should say Active, not Inactive, Expired, Suspended or Revoked, and the classification must cover your type of work. In California, for example, a general building license (B) does not authorize electrical work without a C-10 license.
What is an ACORD 25 certificate of insurance?
It is the standard one-page form an insurance agent issues to show a contractor's coverage: general liability, workers' comp, auto and umbrella, with policy numbers, dates and limits. SiteVetter calls it a snapshot and not a guarantee, which is why you verify it with the agent.
Does the contractor's truck insurance cover damage to my house?
No. Auto coverage is a separate line on the certificate from general liability, which is the policy that responds to damage or injury caused by the work. A certificate that shows only auto or only workers' comp tells you nothing about your protection if a job goes wrong.
What liability limits should a contractor carry?
SiteVetter's guide names $1 million per occurrence and $2 million aggregate as the standard minimum for general liability on commercial work. For residential jobs under $1 million it treats an umbrella policy as optional, and for roofing it suggests an extra $1 million to $2 million. Ask your own insurance agent what fits your job.
What is the difference between a certificate holder and an additional insured?
A certificate holder gets notice rights at most and no coverage. An additional insured gets actual coverage, including defense and payment of covered claims under the contractor's policy. If you want that protection, ask for additional insured status in writing.
How can I tell if a certificate of insurance is fake?
SiteVetter lists red flags: edited fonts or misaligned boxes, an editable PDF, an occurrence limit higher than the aggregate, a certificate dated more than 30 days ago, and policy dates that start the day you asked for the certificate. The surest check is to call the agent using a phone number you found yourself, not the one printed on the form.