How to check a contractor license and insurance

A contractor's license tells you a few important things: that a government board knows who they are, that they met the board's requirements, and that there's somewhere to turn if things go wrong. The FTC's first piece of advice on hiring is to consider only contractors who are licensed and insured, and to check the license with your state or county.

The good news is that most states let you look up a license online for free, in a few minutes. Here is how to do it, what to look for and how to check insurance too.

Who licenses contractors

There's no national contractor license. Each state decides which trades to license, and some leave certain trades to cities or counties. A few general patterns:

Electricians, plumbers and HVAC contractors are licensed in most states, sometimes by separate boards.
General and residential building contractors are often licensed by a state contractor board.
Specialty trades like roofing, painting and handyman work vary the most. Some states license them, some require registration only above a dollar amount, and some don't regulate them at the state level.

Two examples of dollar thresholds: South Carolina requires residential specialty contractors, including roofers, carpenters, drywall installers and painters, to register for jobs over $500. California lets unlicensed workers do jobs under $1,000 in labor and materials only if no permit is needed and they have no employees. Rules like these change, so always check your own state's board.

How to search a license, step by step

Get the details. Ask the contractor for their full business name, their own name and their license number. A reputable contractor will give it right away, and the FTC says it belongs on your contract.
Find your state's board. Search your state name plus the trade plus "license lookup," for example "Ohio electrical license lookup." Make sure the site ends in .gov or is clearly your state's official agency.
Search by license number first. It's the most precise. If that doesn't work, try the business name, then the person's name.
Check the status. It should say active or current. Look out for expired, suspended, revoked or inactive.
Check the license type. Make sure it covers your job. A residential builder license may not cover electrical work, for example.
Match the names. The name on the license should match the business quoting you.
Look for discipline. Many boards list past complaints, fines or disciplinary actions.
Check locally too. Some cities and counties have their own contractor licenses or registrations. Your building department can tell you.

Example: South Carolina LLR

In South Carolina, the Department of Labor, Licensing and Regulation (LLR) handles contractor licensing. Its Residential Builders Commission licenses residential builders and residential electrical, HVAC and plumbing contractors, and registers residential specialty contractors such as roofers, siding and insulation installers, masons, drywall installers, carpenters and painters, per LLR's specialty registration page.

To search, go to LLR's Residential Builders licensure page and choose Licensee Lookup. You can search by name or license number and see the license type and status. Every state organizes this differently, so use this as a model, not a rule.

What insurance to ask for

A license and insurance protect you in different ways. Ask for both kinds of coverage below, and ask the contractor to have their insurer send you a certificate of insurance.

General liability insurance. Covers damage the contractor causes to your property, like a ladder through a window or a leak from their work.
Workers' compensation. Covers workers injured on your job. Rules on who must carry it vary by state, so ask how they would handle an injury on your job.

Don't just look at the certificate. California's Department of Insurance recommends verifying the coverage directly with the insurer, in its guide to avoiding contractor scams. Call the phone number on the insurer's own website, not one written on the certificate, and confirm the policy is active and covers the dates of your job.

Check complaints and the BBB

A clean license doesn't guarantee good service, so check reputation too:

Better Business Bureau. A contractor's free business profile on bbb.org shows complaint history, customer reviews and whether the business is BBB accredited. The BBB is a private organization, not a government licensing agency, so use it alongside the license lookup, not instead of it.
Consumer protection offices. The FTC suggests checking with your state or local consumer protection office for complaints. In South Carolina, the Department of Consumer Affairs has a searchable complaint database.
A plain web search. The FTC recommends searching the company name with words like "complaint," "review" and "scam."
References. Call two or three recent customers with similar jobs.

Keep a record of what you checked

Take a screenshot or print the license lookup page, and save the certificate of insurance with the date you confirmed it. Put both in a folder with the estimate and, later, the contract. If a dispute comes up months from now, you'll have proof of who you hired and what they told you. It also makes the next job easier: if you were happy with the work, you already have their details and can simply re-check that the license and insurance are still current.

What to do with what you find

If the license is active, matches the business, covers your job and the insurance checks out, you can move on to comparing quotes. If anything is off, like a license in someone else's name, an expired policy or a contractor who won't share their number, move on. There are other contractors.

For the full hiring process, see how to hire a contractor and contractor red flags. Or send a free match request and we'll connect you with local pros.

Common questions

What if my state doesn't license the trade I need?

Some trades, like handyman work, may be licensed only by the city or county, or only above a dollar amount. Check your city or county building department, and lean harder on insurance, references and complaint records.

What insurance should a contractor have?

Ask for general liability insurance, which covers damage to your property, and workers' compensation, which covers workers hurt on your job. Ask for a certificate of insurance and call the insurer to confirm it's active.

Is a BBB rating the same as a license?

No. The Better Business Bureau is a private organization, not a licensing agency. A BBB profile can show complaint history and reviews, but you still need to check the license with your state or local board.

What does it mean if the license is expired or suspended?

Don't hire that contractor until it's resolved. Ask why, and confirm with the licensing board directly. Working on an expired license can mean they can't pull permits or that you have fewer protections.