How to Verify a Contractor’s Insurance Before Any Work Begins

Hiring an uninsured contractor is one of the riskiest decisions a homeowner can make. If a worker is injured on your property, or if the contractor damages your home and disappears, you could be left with medical bills, legal liability, or an unfixed problem and no recourse. This guide walks through exactly what insurance to verify, how to verify it, and what the documents actually mean.

Why Contractor Insurance Verification Matters

Here’s what happens when it goes wrong:

Scenario 1: A roofing crew member falls from your roof and breaks his leg. The contractor has no workers’ compensation. The injured worker files a claim against your homeowners insurance — or worse, sues you personally.
Scenario 2: A plumber accidentally breaks a supply line and causes $30,000 in water damage. He has no general liability insurance and goes out of business before you can pursue him.
Scenario 3: A contractor misrepresents his insurance status, takes a deposit, and does shoddy work. You discover later he was operating on a lapsed policy.

All three scenarios are preventable with 10 minutes of verification before work begins.

The Three Types of Insurance to Verify

1. General Liability Insurance (GL)

General liability covers property damage and bodily injury that the contractor causes to third parties — meaning your property and people on it.

What it covers:

Damage to your home during work
Damage to neighboring properties (falling debris, overspray, etc.)
Third-party injuries (a visitor who trips over their equipment)

What it does NOT cover:

The contractor’s own employees (that’s workers’ comp)
Defective workmanship in most states (covered separately under completed operations)

Minimum limits to look for:

$1,000,000 per occurrence
$2,000,000 aggregate (total for all claims in a policy period)

For large projects — additions, full roof replacements, HVAC system installations — request higher limits ($2M per occurrence) or confirm the aggregate is sufficient.

2. Workers’ Compensation Insurance

Workers’ comp covers medical expenses and lost wages for employees injured on the job. Without it, an injured worker can potentially file a liability claim against you as the property owner.

Who needs it:

Any contractor with employees (in most states, even one employee triggers the requirement)
Subcontractors they bring on to your job

Who may be exempt:

Sole proprietors with no employees (varies by state — some states exempt them, others don’t)
LLCs with only members and no employees (state-dependent)

Why this matters to you: Even if the contractor is exempt, verify the status. Don’t assume exemption — require documentation or a written statement explaining the exemption and why it applies.

3. Contractor’s License and Bond

License: Required for most trade work (electrical, plumbing, HVAC, roofing) in most states. Licensure means the contractor has passed competency exams and met education/experience requirements.

Bond (Surety Bond): A bond is a financial guarantee. If the contractor abandons the job or fails to complete it as agreed, the bond provides a source of funds for the homeowner to recover losses. Bonds are separate from insurance.

What to verify:

License number and expiration date
License type (general contractor, electrical, plumbing, etc.)
Disciplinary history or complaints with the state licensing board

What Is a Certificate of Insurance (COI)?

A Certificate of Insurance (COI) is a one-page document that summarizes an insurance policy’s key details. It’s issued by the contractor’s insurance company or agent and given to you as proof of coverage.

What to Look for on a COI

Field	What It Means
Insured	Should match the contractor’s company name
Policy number	Verify it’s active, not a sample
Effective dates	Policy must be active during your project
Coverage type	GL, Workers’ Comp, Auto — check all three
Per occurrence limit	Maximum payout for a single claim
Aggregate limit	Total maximum for all claims in the policy period
Certificate holder	Request your name and address here
Additional insured	(See below)

Request to Be Added as an Additional Insured

For larger projects, ask the contractor to add you as an Additional Insured on their general liability policy. This means:

You have direct rights under their policy
You can file a claim directly if their work damages your property
You’ll be notified if the policy is cancelled

This is standard practice for commercial work and increasingly common for residential projects. The contractor asks their insurer to issue an endorsement — it costs the contractor nothing or minimal cost.

How to Actually Verify the Certificate

A COI alone isn’t proof of active coverage — anyone can create a fake one. Here’s how to verify it’s real:

Step 1: Check the Insurance Company

Look up the insurance company named on the certificate. Verify it’s a real, licensed insurer in your state via your state’s Department of Insurance website.

Step 2: Call the Agent Directly

The certificate lists an “authorized representative” or agent. Call them and ask:

“Is [policy number] currently active?”
“Are the limits accurate as shown on this certificate?”
“Is [contractor name] the named insured?”

This call takes 3 minutes and confirms authenticity.

Step 3: Check License Status

Visit your state contractor licensing board website and enter the contractor’s license number. Verify:

License is active
License type matches the work being done
No disciplinary actions or suspensions on record

Most state boards have free public lookup tools.

Contractor Insurance Requirements by Project Type

Project Type	GL Minimum	Workers’ Comp	License Required
Roofing	$1M–$2M	Yes	Yes (most states)
Electrical	$1M	Yes	Yes (always)
Plumbing	$1M	Yes	Yes (always)
HVAC	$1M	Yes	Yes (most states)
General remodel	$1M	Yes	Yes (varies)
Landscaping	$500K–$1M	Yes (if employees)	Varies
Handyman (minor repairs)	$300K–$500K	Verify exemption	Varies
Painting (exterior)	$500K–$1M	Yes	Varies

Requirements vary by state. When in doubt, require higher limits.

Red Flags and Warning Signs

Insurance Red Flags

Refuses to provide a COI before starting work
COI shows an expiration date before your project completion
Policy limits seem too low for the scope of work
Insurance company named on COI is unfamiliar or out-of-state
Can’t provide workers’ comp and offers no explanation of exemption

Business Red Flags

No local address or uses only a PO box
Can’t provide a license number for verification
Pressures you to pay cash to “save on taxes”
Offers to waive your insurance deductible (illegal in most states)
Claims not to need a permit for work that legally requires one

When a Subcontractor Is Involved

Many contractors bring in subcontractors for specialty work (electrical, plumbing, tile, etc.). Ask:

Does the general contractor’s policy cover their subs, or do subs carry their own?
Request COIs for all subcontractors performing significant work
Verify that subs’ workers’ comp covers their crews — GC policies don’t always extend to uninsured sub employees

This is especially important for roofing, where subcontracting is common and documentation often lapses.

Frequently Asked Questions

Q: Can I require insurance as a condition of hiring? Absolutely. This is standard practice. Any professional contractor should expect this request. If a contractor balks at providing proof of insurance, that itself is a red flag.

Q: What if the contractor says they’re a sole proprietor and don’t need workers’ comp? This may be legally accurate in some states for true sole proprietors with no employees. Require written confirmation and verify the exemption with your state’s workers’ comp board. If the contractor brings a crew, they likely do have employees and the exemption may not apply.

Q: Does my homeowners insurance cover contractor injuries? Potentially — under your premises liability coverage. But filing a claim raises your rates, and your coverage limits may not be sufficient for serious injuries. Don’t rely on your policy; require the contractor to carry their own.

Q: Should I require automobile liability insurance too? Yes, for contractors who use vehicles on your property or transport materials. Auto liability covers accidents involving their business vehicles. Request a certificate showing commercial auto coverage.

Q: How long should I keep the contractor’s insurance documents? Keep all COIs and contractor documentation for the life of the work performed. If a latent defect or injury surfaces two years later, you’ll need the records to verify coverage was in place at the time of the work.

Q: The contractor wants payment before showing me insurance. Should I pay? No. Insurance verification should happen before signing any contract or providing any deposit. Payment leverage is one of your best tools for getting documentation.

Quick Verification Checklist

Before authorizing any work:

Ten minutes of verification prevents months of potential problems.

How to Verify a Contractor's Insurance Before Any Work Begins