How to check a professional's licence and insurance

Licences, registrations and insurance are the paperwork that sits between you and a disaster when you hire someone. A licence tells you the person has met a minimum standard and answers to a regulator. Insurance tells you there is money to pay for damage or injury. Both can be claimed falsely, borrowed from someone else, or allowed to lapse. Checking takes minutes, and it is the single most useful thing you can do before hiring.

Licence, registration, certification: what’s the difference?

A licence is permission from a government body to do certain work, usually after meeting requirements such as exams, experience or bonding. Working without one where it is required is often illegal. A registration may simply mean the person has listed themselves with an authority, sometimes with fewer checks. A certification is usually awarded by a trade body or manufacturer and shows training, but is often voluntary. All three can be meaningful; the point is to know which you are looking at and who issued it.

How to look up a licence

Ask for the licence number and the exact name it is held under, then look it up yourself on the issuing body’s official website. Do not rely on a photo of a card or a link the contractor sends you. In the US, search for your state plus “contractor licence lookup” or the relevant trade, and make sure the result is a government website. When you find the record, check:

• The name matches the person or business you are hiring.
• The status is active, not expired, suspended or revoked.
• The classification covers the work you need (a general building licence may not cover electrical work).
• Any disciplinary actions, citations or complaints on file.
• Any bond on record, and its amount.

Some US states require contractors to hold a licence bond. It is usually a fixed, modest sum that can compensate consumers in certain situations, but it is rarely enough to cover a large job, so treat it as a small safety net rather than full protection.

Where to check common professions

If you are in another country, the principle is the same: identify the official regulator for the profession and search its public register directly.

How to verify insurance properly

For trades working on your home, the two policies that matter most are general liability (which covers damage to your property or injury to others caused by the work) and, in the US, workers’ compensation (which covers the contractor’s employees if they are hurt on your property). Without workers’ comp, an injured worker could in some circumstances look to you or your homeowner’s policy.

Ask for a certificate of insurance. A certificate is only a snapshot and can be out of date or forged, so verify it:

1. Ask the contractor’s insurance agent or insurer to send the certificate directly to you, with you named as the certificate holder.
2. Look up the insurer’s phone number yourself and call to confirm the policy is active and covers the dates of your job.
3. Check the policy limits and whether the type of work you are hiring for is covered.

Some small contractors legitimately have no employees and may be exempt from workers’ compensation in their state. Ask how they handle helpers and subcontractors, and whether those subcontractors carry their own cover.

Red flags in the paperwork

• A licence number that belongs to a different name, or to a business that has been dissolved.
• A licence that is “pending” or “in renewal” with no record you can find.
• Insurance certificates that arrive from the contractor rather than the insurer, or with dates that do not cover your job.
• Reluctance or irritation when you ask to verify anything.
• Pressure to use their “cousin’s” licence or to put the permit in your name as an owner-builder.

That last one matters: if you pull a permit as the owner, you may take on responsibility for the work and for anyone working on your property.

Recheck on long jobs

Licences and insurance policies expire and can be cancelled for non-payment. For jobs lasting several months, confirm cover again before large stage payments. It takes one phone call and it closes a gap that otherwise nobody would notice until something went wrong.

Once the paperwork checks out, move on to references, contracts and payment terms in our guide to vetting a contractor.