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How to Verify a Contractors License and Insurance | Billy.com

When you hire a general contractor to work on your home, you need to be able to trust him or her to complete the job completely and on time. This means that you need to make sure that your contractor has the proper license, insurance, and bond to complete the task. Use this guide to learn more about the contractor’s license and how to check a contractor’s license to make sure it’s legitimate.

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the basics of contractor licensing & how to check a contractor license

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If you automatically assume a contractor is licensed or must be licensed to work, you could be wrong. Each state has its own set of regulations that govern what a general contractor needs to do to work and how to verify a contractor’s license. While most states regulate contractors in some way, some states do not have licensing laws, and even individual cities or counties may have their own laws.

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In its most basic definition, a license means that the contractor has registered with the agency and has a minimum amount of bond or insurance. Some cities, like New York City, base their laws on a dollar amount. For nyc, anything over $200 must be done by a professional licensed by the city.

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There are also trade-specific laws and licenses that regulate contractors in many areas. In many areas, a general contractor may not perform certain tasks, such as electrical work, plumbing work, or HVAC work. If your job requires work of this caliber, you’ll likely need to hire a specialist in addition to your general contractor, so you’ll want to know how to verify a contractor’s license.

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Reading: How to verify a contractor’s insurance

a breakdown of contract licensing terminology

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As you search for the right general contractor and learn how to verify a contractor’s license, understanding the terminology will help. Learning the definitions below will help you determine if a contractor has the right qualifications to meet your needs.

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linked

When a contractor is bonded, he or she has a private bond issue by an insurer or a licensing municipality. If the contractor does not complete his work according to her specifications, he can request a refund from the issuer of the bond.

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secured

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Reading: How to verify a contractor’s insurance

An insured contractor is essential if you want to protect your property while on the job. always ask for proof of insurance, such as a certificate, and then call the provider to verify that the policy is up to date and covers your project.

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licensed

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A general contractor working on large projects in your home must have a valid business license that complies with state or local regulations. Licensed contractors have generally had to take certain classes and pass competency tests, as well as prove they have an insurance policy.

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registered

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A registered contractor hasn’t received as much training as a licensed contractor, but still pays a fee and must show proof of insurance. some registered contractors must also be bound. note that some regions use the terms “licensed” and “registered” interchangeably.

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the importance of insurance

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Preferably, your contractor will be bonded and insured. At a minimum, he or she must have liability and workers’ compensation coverage. Liability insurance protects your property and that of your family or friends in the event that the contractor or subcontractors cause damage or injury during their jobs. workers’ compensation is another essential policy. This policy ensures that workers who are injured on the job have access to compensation for lost wages and medical services. if your contractor doesn’t have coverage for this, you could be hard pressed for expenses, especially if your homeowners policy isn’t substantial enough for these kinds of situations.

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the importance of bonding

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Although linking is not always necessary, it is still important. A bond protects you if your contractor doesn’t complete work, pay permits, avoid paying your subcontractors, etc. Without a bond, you could be in hot water for any bills that a contractor doesn’t pay.

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It helps to know how a bond works. when a contractor buys one, he must pay the premiums, like a traditional insurance policy. the premium depends on the amount of the bond, as well as the contractor’s track record. if he decides that he needs compensation from the bond, he must contact the bond provider and show proof that the contractor did not complete his work in accordance with the agreement. To find out how to verify a contractor’s license, make sure your contractor is bonded by requesting the certification and bond number before signing an employment contract.

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how to find properly licensed contractors

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When it’s time to find a contractor, the Better Business Bureau will help you learn how to verify a contractor’s license. A BBB-accredited business must have proof that it is licensed, bonded, and insured. however, do not rely solely on information from bbb. be sure to ask for proof in person as well.

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billy.com is another great starting point. The website provides information on how to verify a contractor license, a list of local contractor licenses and insurance, as well as consumer ratings, reviews, and references. this makes it easier for homeowners like you to read the list without having to call each one individually.

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Finally, don’t be afraid to ask around the neighborhood. Talk to friends or family who have had home renovations done in the past few years, or even ask your neighborhood Facebook group if there is one.

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how to check a contractor’s license

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If you’re not sure how to check for a contractor’s license or where to start, you have several options. Beyond checking the Better Business Bureau, you can request a potential contractor’s business license number and proof of a bond or other insurance. Once you have the necessary information, you can visit your state’s licensing board website to verify the license. Please note that not all information will be online, so you may need to call or even visit the office in person.

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once you decide on a contractor who meets all the legal requirements to work on your home, be sure to keep copies of your paperwork, including the contract, all communications and proof of payment. this will come in handy in case you run into any problems.

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When it comes to learning how to verify a contractor’s license, it can be tempting to hire someone as quickly as possible. however, taking the extra time and doing the extra work ensures that you hire a true professional like the ones available at billy.com. remember, a little extra work now could save you a lot of money later.

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