Before you talk about timelines, materials, or budget, there are two things every homeowner needs to confirm about any contractor they’re considering: are they licensed, and are they properly insured?
These aren’t formalities. They’re the difference between a project that’s protected and one where you’re personally on the hook if something goes wrong. An unlicensed contractor may do fine work — or they may disappear after the deposit. An uninsured one could leave you paying out of pocket for property damage or a worker’s injury that happened on your property.
“Homeowners often feel awkward asking for proof of insurance — like they’re accusing the contractor of something. But any contractor worth hiring will hand it over without blinking. The ones who get defensive or evasive? That tells you everything.”
— Astrit, licensed general contractor and engineer with 28 years in residential and commercial construction
The good news is that these questions are easy to ask, and easy to verify. Here’s exactly what to ask, what to listen for, and what to do with the answers.
Table of Contents
Licensing Questions to Ask
Are you licensed to perform this type of work in this region or state?
This is the single most important question on the list. Licensing requirements vary significantly by region and by trade — what’s required in many regions differs from what’s required in Texas — but in most jurisdictions, contractors performing work above a certain dollar value must hold a valid licence.
Don’t just ask. Verify. Most regional licensing bodies maintain public databases where you can look up a contractor’s licence status, check if it’s current, and see whether any complaints or disciplinary actions have been filed against them.
What a good answer looks like: A specific licence number, the name of the issuing body, and no hesitation whatsoever. A good contractor will often offer this before you finish asking.
Red flag: Any version of “we don’t need a licence for this” or “we’re in the process of getting licensed.” For significant renovation work, that’s not acceptable.
Is your licence current and in good standing?
A licence that expired two years ago, or one that’s been suspended following a complaint, is not a valid licence. Ask specifically about current status — not just whether they’ve ever been licensed.
Then verify it yourself using your regional or state licensing database. The search takes two minutes and could save you significant money and grief.
What a good answer looks like: Confirmed current status, with an expiry date that extends beyond your project’s completion.
Do your subcontractors hold their own licences for their trades?
A general contractor’s licence covers their scope of work — it does not automatically cover the electricians, plumbers, or HVAC technicians they bring in. Each licensed trade typically requires its own separate licence. Ask whether the subs your GC uses are individually licensed, and ask to see proof for any trade where licensing is required.
For more on this topic, see: Questions to Ask About Subcontractors Your GC Is Using
What a good answer looks like: Confirmation that all subcontractors hold the appropriate trade licences, with documentation available on request.
Insurance Questions to Ask
Do you carry general liability insurance?
General liability insurance protects you if the contractor’s work causes damage to your property — or to a neighbor’s property. If a wall comes down that wasn’t supposed to, or a pipe bursts because of something done during the renovation, liability insurance is what covers the repair.
Ask for a certificate of insurance, not just verbal confirmation. The certificate should show:
- The name of the contractor’s company as the insured
- Coverage limits (for most residential projects, $2 million in coverage is a reasonable minimum)
- A policy that is currently active and won’t expire mid-project
What a good answer looks like: A certificate of insurance emailed to you within 24 hours, with adequate limits and a valid policy period.
Red flag: “I can get you that later” or any reluctance to provide documentation. Legitimate contractors keep this on file and can produce it immediately.
Do you carry workers’ compensation insurance for your crew?
This is the one most homeowners don’t think to ask — and the one that can hurt them the most if they skip it.
If a worker is injured on your property and the contractor doesn’t carry workers’ compensation, you could be held liable for their medical costs and lost wages. This isn’t a hypothetical — it happens. In many jurisdictions, if a contractor can’t demonstrate workers’ comp coverage, the liability for injuries defaults to the property owner.
Ask for proof of workers’ compensation coverage separately from general liability. In your country, you can verify coverage through your regional workers’ compensation board (your regional workers’ compensation board). Different regions have their own workers’ compensation authorities.
What a good answer looks like: A current workers’ compensation clearance certificate, obtained directly from the relevant authority — not just a document the contractor has printed themselves.
Are your subcontractors covered under your insurance, or do they carry their own?
This matters more than most homeowners realize. Some GC policies extend coverage to subcontractors working on their projects. Others don’t — meaning each sub needs their own policy. If a subcontractor isn’t covered under either policy, you have a gap.
Ask the contractor directly how their policy handles subs, and request documentation that confirms it.
What a good answer looks like: Either confirmation that subs are covered under the GC’s policy, or separate certificates of insurance for each major subcontractor.
What happens if your insurance doesn’t cover something that goes wrong?
This is a useful stress-test question. A contractor who has thought carefully about liability will have a clear answer — whether it’s a supplemental policy, a contractual clause, or a warranty that fills the gap. One who hasn’t thought about it will stumble.
The answer also tells you whether this is a contractor who takes responsibility seriously, or one who hopes problems don’t come up.
How to Verify What You’ve Been Told
Asking is step one. Verifying is step two. Here’s how to do both:
Licence verification: Search your regional or state contractor licensing database. In many regions, use the relevant trade licensing body or the relevant trade body. In the US, each state has its own licensing board — the Contractors State License Board in California, for example. Search by company name and licence number.
Insurance verification: Don’t rely on a certificate alone — certificates can be fabricated or outdated. Call the insurance provider listed on the certificate and confirm the policy is active and the coverage matches what you were told.
Workers’ compensation verification: In many regions, request a workers’ compensation coverage Clearance Certificate directly from the workers’ compensation coverage website, using the contractor’s account number. In other regions and US states, similar clearance systems exist. This takes less than five minutes and is the only way to be certain.
A Note on Cash-Only Contractors
If a contractor asks to be paid in cash and can’t produce a licence or insurance documentation, those things are almost certainly connected. Operating without a licence or insurance is a business choice — it reduces their costs and their accountability. It transfers all the risk to you.
This doesn’t mean every cash contractor is a bad one. But it does mean you have no recourse if the work is substandard, the project is abandoned, or someone gets hurt.
Quick Reference: What to Ask and What to Verify
| Question | What to look for | How to verify |
|---|---|---|
| Are you licensed? | Current licence number + issuing body | Provincial/state licensing database |
| Is your licence in good standing? | Active status, no suspensions | Same database — check complaint history |
| Do you carry liability insurance? | Certificate showing $2M+ coverage | Call the insurer directly |
| Do you carry workers’ comp? | Current clearance certificate | WCB/workers’ compensation coverage portal or equivalent |
| Are your subs covered? | Policy extension or separate certs | Request documentation per sub |
Related Questions
- Questions to Ask a General Contractor Before Signing Anything
- Questions to Ask a General Contractor for References and Past Work
- Questions to Ask About Subcontractors Your GC Is Using
- What Does “Bonded and Insured” Actually Mean for a Contractor?
- Red Flags When Hiring a General Contractor