How to verify a contractor's insurance

To verify a contractor's insurance, ask for a certificate of insurance, then confirm it with the insurance agent or carrier named on it rather than relying on the paper alone. Check the contractor's license with the CSLB License Check, and look at what CSLB shows about workers' compensation on that license. Do this before you sign, and again if the job runs long enough for a policy to expire. This guide covers the checks. For the wider hiring checklist, see how to choose a remodeler.

Which coverage to ask about

Two kinds matter to a homeowner.

• Liability insurance. This responds when the contractor's work damages your property or someone else's, such as a water leak from a plumbing mistake or a fire from a torch.
• Workers' compensation. This pays for medical care and lost wages if a worker is hurt on the job. It is the coverage California law makes mandatory for employers.

A contractor's vehicle and equipment coverage is their business, not yours. Focus on the two above.

What California says about workers' compensation

CSLB states that California law requires employers, including construction employers, to carry workers' compensation insurance even with one employee. License holders must file a Certificate of Workers' Compensation Insurance or a Certification of Self-Insurance with CSLB. A license can be suspended when coverage lapses.

A licensee with no employees can instead file a signed exemption. That exemption is not available in every case: CSLB says it does not apply when the license is qualified through an RME, or for certain classifications. If an exempt contractor hires a covered employee, the exemption is void and proof of coverage is due within 90 days. The practical question to ask is simple: "Do you have employees, and will anyone besides you work on my job?"

Step by step: how to check

1. Get the license number. It belongs on the estimate and the contract.
2. Run the CSLB License Check. Confirm it is active, matches the business name and carries a classification that fits your job. The page also shows the workers' compensation status on file.
3. Ask for a certificate of liability insurance. Have it sent directly from the contractor's insurance agent where you can.
4. Read the certificate. Check the insured's name, the type of coverage, the carrier and the policy dates.
5. Call the agent or carrier. Ask if the policy is active and whether it has been cancelled or changed. This is the step most homeowners skip.
6. Ask about subcontractors. If subs will work on your house, ask whether they carry their own coverage and whether the general contractor's policy extends to them.
7. Put it in the contract file. Keep a copy of the certificate and the date you checked.

How to read a certificate

A certificate shows who is insured, the type of policy, the policy period and the carrier. Check these:

• The insured name matches the licensed business, and is not merely a person with a similar name.
• The policy period covers your whole project, and runs past the start.
• The liability coverage type is listed. A certificate for workers' compensation alone is not proof of liability coverage, and the reverse is also true.
• The certificate is a summary. It does not change the policy, so confirm any detail you are relying on with the agent.

Policy limits and exclusions are specific to each policy, so ask the agent what is covered rather than guessing. Ask your own homeowner's insurance agent how your policy treats a major remodel, and whether to tell them about the project.

Warning signs about insurance

• The contractor will not name their agent or carrier
• A certificate that looks altered, or is made out to someone else
• "I do not have employees" from a contractor whose crew is clearly several people
• A policy that expires during your project with no mention of renewal
• An answer of "my subs have their own" with no proof

If you see one, ask a direct question in writing. Our red flags guide covers the other warning signs.

Licensing and insurance together

CSLB advises hiring a licensed B general building contractor when a job involves more than two kinds of work on a building, with a kitchen remodel as the example. Whichever license applies, the license check and the insurance check go together. A licensed contractor with valid coverage is the baseline, not a bonus. N. Abeyta Remodels is licensed and insured, and we are happy to show you how to confirm it. See our general contractor page, or contact us for a free estimate.

Verifying contractor insurance: questions