How to check a contractor's license and insurance before you hire

Why the check matters

A license number on a quote does not prove the license is current, belongs to that business or covers your type of work. Insurance works the same way: a certificate can be expired or issued to a different company. A five-minute check before you sign can save you a dispute later.

The FTC advises considering only contractors who are licensed and insured, checking with your state or county government to confirm a license, and asking for proof of insurance.

Step 1: Get the exact details from the quote

Before you search, write down:

• The business name exactly as printed, plus any trading name.

• The license or registration number.

• The name of the person who signs the contract.

• The address and phone number.

If any of these is missing, ask for it. The FTC says a contract should include the contractor's name, address, phone number and license number.

Step 2: Search the official register

Licensing is set at state, provincial or territory level, and sometimes by a city or county. Use the government register, not a review site.

United States

• Licensing rules differ widely by state. Some states license general contractors; others license only certain trades, or leave it to counties and cities. Start with your state's contractor licensing board or consumer protection office.

• California. The CSLB's online License Check lets you search by license number, business name or personnel name, check the license status and see complaint disclosures.

• Illinois (roofing). The Illinois Department of Financial and Professional Regulation (IDFPR) licenses roofers. Its consumer brochure says to write down the license number and verify it on the IDFPR website, and that the number must appear on contracts and bids.

Canada

• Licensing of renovators varies by province and, in some places, by city. Check your provincial consumer protection office and your municipality.

• Ontario. Ontario's renovation guidance says to search the Consumer Beware List for complaints or charges, searching both the business name and the operator's name, since one person may run several businesses. It also suggests checking convictions under the Consumer Protection Act.

Australia

• New South Wales. A licence is required for residential building work valued at more than $5,000 including GST, and for specialist work such as electrical, plumbing and gasfitting regardless of cost. The NSW Verify Licence tool shows the holder's name, licence number, categories, expiry date, status, conditions and any disciplinary history.

• Queensland. The QBCC licensee register lists all licensed contractors with their licence history. A licence is needed for building work valued at $3,300 or more, and for plumbing, drainage, gasfitting and fire protection work regardless of value. If you can't find someone, the QBCC says there's a chance they're not licensed.

• Victoria. For contracts over $10,000, Consumer Affairs Victoria tells owners to confirm the builder is currently registered with the Building and Plumbing Commission.

Other states and territories run their own registers. Search your state's building or fair trading regulator.

Step 3: Read the result carefully

A "found" result is not the end of the check. Look at:

1. Name match. Does the licensed name match the business on your quote? NSW notes that a licence in an individual's name doesn't cover their company or partnership. QBCC also asks you to check the name matches.

2. Status. Current, expired, suspended or cancelled.

3. Class or category. Does it cover your job? A painting license does not cover structural work.

4. Expiry date. Will it still be current when the work is done?

5. Disciplinary history. Warnings, conditions, fines or complaints.

Step 4: Check insurance

Ask for certificates, then confirm them. Common types:

• Liability insurance. Covers damage to your property or injury to others caused by the work.

• Workers' compensation. Covers the contractor's workers if they are injured on your property. Illinois' roofing brochure tells homeowners to ask for proof of current insurance and to check for workers' compensation.

• Home warranty or building insurance (Australia). Some states require the builder to take out insurance that protects the owner in set circumstances, such as some cases of incomplete or defective work. Each scheme has its own triggers and limits.

For Australian home building insurance:

• New South Wales. For contracts over $20,000, the contractor must give you a Home Building Compensation certificate. The contractor can't ask for a deposit or other payment until the cover is in place and you have the certificate. You can check it with the insurer or HBC Check.

• Victoria. For contracts above $16,000, Consumer Affairs Victoria says the builder should give you a current domestic building insurance certificate covering the property's address.

For liability and workers' compensation in the US and Canada, call the insurer or broker named on the certificate. Confirm the policy is active, the named business matches and the dates cover your project.

Step 5: Check the people doing the work

• Subcontractors. If the main contractor uses subcontractors for electrical, plumbing or roofing, ask whether they are licensed for that work. Illinois says a roofing subcontractor must also be licensed.

• Salespeople. In California, home improvement salespeople are registered separately, and the CSLB License Check covers them too.

• Permits. The FTC lists asking you to get the building permits as a scam warning sign. A licensed contractor normally pulls them.

Red flags

• No license number on the quote or ads.

• A license number that belongs to a different business name.

• Reluctance to share insurance certificates. After a disaster, the FTC calls a refusal to give copies of a license, insurance or written contract a red flag.

• A claim that no license is needed for work that clearly requires one.

Get a second pair of eyes on your contractor's quote

EasyToDecode is launching soon. It will read your quote, pick out the business name, license number and insurance details, flag what's missing, and list the questions to ask before you sign. You'll still check the official registers yourself. See how it works or join the waitlist.