As a general contractor or a remodeling business owner, your subcontractors and trade partners reflect directly on your operation. One uninsured worker injury or an unlicensed trade on-site can create liability, undermine insurance coverage, and damage your reputation.
To check if a contractor is licensed and insured, collect their license number and Certificate of Insurance (COI), verify active status and the correct classification on your state or local portal, call the insurer to confirm current liability (and, if applicable, workers’ comp), and confirm any required bond.
This guide walks you through each step, showing how to integrate this verification process into a repeatable and trackable workflow.
The way you source subcontractors can influence every part of a project. Unqualified or unverified trades often cause delays, rework, or compliance issues that could have been avoided at the hiring stage.
The first step to a lower-risk partnership is sourcing from reputable channels. Instead of open marketplaces or casual referrals, focus on networks that maintain accountability.
Set up an “Approved Subcontractor Register” in your CRM, contractor software tools, or shared drive. Review the list quarterly and automate reminders for expiring documents to ensure that no subcontractor works with expired credentials. Make sure to include the following fields:
A claim of being “licensed and insured” means little without proof. Verification should happen before a contract is signed, not after work begins.
Request digital copies of these documents from each subcontractor and ensure all documents list the same legal business name that appears on the bid or contract:
Use official verification portals to check and confirm the details, not screenshots or PDFs. Additionally, maintain a verification log that records the date, source, and findings. Store this with your contract files for auditing or dispute resolution. Always check for:
Note: Visibility varies by state.
Contact the insurance provider listed on the COI to confirm the policy is active and meets general contractor insurance requirements for the type of work being performed. If a subcontractor operates without employees, confirm your state’s rules on workers’ compensation exemptions. In general, you should pay attention to:
For public projects or large private jobs, bonding provides a layer of security. For public projects or large private jobs, performance and payment bonds provide remedies if the contractor defaults.
Ask for the bond number, issuing company, and coverage amount. Then contact the surety company to verify it is valid. Keep a copy of the confirmation for your compliance files.
Want a head start on checking if a contractor is licensed and insured? Every state has its own licensing authority, and verification requirements vary. Some issue statewide licenses, while others delegate authority to cities or counties.
Using an official state contractor lookup portal reduces mistakes and helps ensure compliance across multiple job locations.
For multi-state contractors, maintain a reference sheet linking each verification portal. Here are some selected state portals offered as examples.
Even with skilled teams and solid project management, construction work carries unavoidable risks. Equipment failures, site accidents, and property damage can happen without warning, and when they do, responsibility must be clearly defined.
Verifying insurance and bonding is what keeps those accidents from becoming financial or legal setbacks. It ensures that accountability is distributed correctly and that your business remains protected in the event of the unexpected.
A valid license confirms qualification, but it does not provide financial protection. If a subcontractor damages property or a worker is injured, you need proof of insurance and sometimes bonding to prevent claims against your own policies.
Insurance verification ensures that liability and workers’ compensation risks are shifted appropriately. Without it, you can be responsible for medical bills, property repairs, and legal costs.
Bonding is often required for public projects, but is increasingly used in private construction for high-value jobs. It adds a level of trust and resources if the subcontractor defaults.
Make insurance and bonding verification part of your pre-job checklist, not an afterthought. Avoid some of the most common mistakes, including:
Once a contractor’s credentials are verified, the next step is keeping that process consistent. With multiple sites and deadlines, details can easily slip through the cracks. That’s why making verification a built-in workflow step ensures compliance stays reliable and scalable across every project.
Develop a subcontractor prequalification form. Include questions about licensing, insurance limits, safety record, and prior projects. Automate reminders for expiring documents.
To verify a contractor properly, ensure the name on the license, insurance policy, and contract is identical. If a subcontractor uses a “Doing Business As” (DBA) name, confirm it is legally registered under the same entity.
Align insurance requirements with the project size and risk profile. For example, multi-family construction may require umbrella coverage, while small residential remodels may not. If contractor financing is involved, lenders may also require proof of specific insurance coverage or active licensing before funds are released.
Add language such as: “Subcontractors must maintain valid trade licensing, general liability insurance, and workers’ compensation coverage for the duration of this project. Proof of compliance must be provided before work begins and upon renewal.”
This grants you a contractual right to suspend work under the agreement, subject to any applicable laws.
Use project management tools like Procore or Buildertrend to upload all documentation under each subcontractor’s profile. Tag documents with expiration dates and assign notifications to project admins.
Policies can be canceled mid-term. Periodic spot checks keep your risk exposure low. Designate a compliance coordinator to verify all active policies on a quarterly basis.
Verifying that your subcontractors and trade partners are licensed, insured, and bonded protects your contracts, maintains your reputation, and ensures project continuity.
Consistent compliance checks to prevent financial losses start with mastering how to check if a contractor is licensed and insured. They also streamline your audits and reduce administrative stress during claims or disputes.
This article provides general information for contractors and should not be considered legal, insurance, or compliance advice. Licensing and insurance requirements vary by state, city, and project. Always verify details with official authorities and your counsel or insurance advisor.
