Contractor Licensing and Insurance Compliance

State licensing: most states require GC license (some by trade). Verify: active status, proper classification for work scope, bond amount, complaint history. State license lookup: typically available online through contractor licensing board. Municipal licensing: many cities require separate business license and registration. Specialty licenses: electrical, plumbing, HVAC typically require separate trade licenses.

General liability: minimum $1M/$2M recommended. Workers compensation: required in most states for any employees. Auto liability: for contractor vehicles. Umbrella/excess: additional coverage above primary limits. Verify: active policy with adequate limits, additional insured endorsement naming property owner and lender, waiver of subrogation if required by lender.

Using unlicensed contractors: contract may be void/unenforceable, no license bond protection, no licensing board complaint process, potential liability for unlicensed activity. Using uninsured contractors: property owner liable for worker injuries (workers comp), property owner liable for third-party injuries (general liability), lender policy violations. In many states, property owners can be held liable as the "statutory employer" of workers on their property.

Before contract signing: verify license online (state board), request Certificate of Insurance (COI), verify COI directly with insurance company (fraudulent certificates exist), confirm workers comp coverage or exemption documentation, check complaint and disciplinary history. During project: verify insurance renewal if policy expires during project, confirm subcontractors carry proper coverage, monitor for additional crews not covered.