Checking a license, a bond and insurance
Three public records decide whether a contractor can be held to anything later. All three are free to look at, and an afternoon spent on them is the cheapest hour in a renovation.
Why these three
They are what a dispute later is argued against
Every route a homeowner has after the work goes wrong runs through one of these records. A complaint to a board needs a license to complain about. A bond claim needs a bond. A damaged floor needs an insurer. Where none of the three exists, what is left is a person and a small claims court.1
They are also the only part of hiring that can be checked before any money moves, by anybody, without asking permission. The work itself cannot be inspected in advance. These can.
What each one proves
And the narrower thing it actually says
The license
That the state has issued this person permission to do this trade, and that the permission is current today rather than at some point in the past.
What it does not cover. It says nothing about the quality of the work. A license is a floor, and plenty of licensed contractors are the subject of the disputes on this site.
The bond
That a third party has agreed to pay out, up to a stated amount, if this contractor fails to meet obligations the bond covers.
What it does not cover. The bond is a fixed sum, set when it was issued and shared among everyone who claims against it. It is a fund of last resort, not an insurance policy on your job.
The insurance
That damage caused by the work, and injury to the people doing it, has somewhere to land other than your own policy.
What it does not cover. A certificate is a snapshot. Cover can lapse the week after it was issued, which is why the date on it and the insurer's own confirmation are different things.
The one that catches people
The name on the license has to be the name on the contract
A licensed contractor who sells the job through a differently named company has handed you a contract with the unlicensed half. The license checks out, the bond checks out, and neither of them is attached to the entity that took your deposit. Read the three names together: the one on the quote, the one on the license, and the one on the invoice. Treat any difference as the thing to resolve before signing rather than a formality.
How to look
Six steps, in the order that exposes a problem soonest
Get the legal name and the license number in writing
Ask for both before you look anything up. A quote carrying a trading name and no number is the first thing to resolve, because every record below is searched by one or the other.
Search your state's licensing board for that number
The board that issues the license publishes a register of it. Read the status, the expiry, and the name the license is held in, not just whether a result came back.
Check the name on the license against the name on the quote
This is the mismatch that matters most and the one people skip. Work sold by one entity and licensed to another leaves you contracting with whichever one has nothing behind it.
Ask the surety to confirm the bond, not the contractor
The bond names an issuer. That issuer will confirm whether it is live and for how much. A photographed certificate confirms only that a certificate once existed.
Have the insurer send the certificate directly
A certificate that arrives from the insurer names you and is current on the day it is sent. One forwarded by the contractor is a document they control.
Read the complaint record behind all three
Boards publish disciplinary history, and it is the only one of these records that describes conduct rather than status. A pattern of the same complaint is worth more than any single entry.
Next
What to do with what you find
A clean record is permission to keep going, not a reason to stop reading. The questions to ask are what separate two contractors who both check out, and what a bond is for is worth reading now rather than on the day you need to claim against one.2
Where a record does not check out, that is the answer. The cost of walking away from a quote is the quote.
Disclosures
- 1.Satisfy is not a law firm and does not provide legal advice. This page describes public records and how to read them. It does not assess any contractor, state whether one is properly licensed, or say what any board, surety or insurer will do.
- 2.Which trades require a license, which require a bond, what that bond must be worth, and which body publishes any of it are set by each state and often by each county. Nothing on this page names a body, an amount or a period, because none of the three is the same in any two places. Your state’s licensing board is the authority on all of it.