How do I verify a contractor's bond and insurance?

Bond and insurance are two separate financial protections that protect homeowners differently. Bond is a third-party guarantee tied to license; insurance is the contractor's own risk transfer to a carrier. Verify both, but verify them differently.

Bond verification:

1. The surety bond is on file with the state licensing board as a condition of licensure. Bond information is public. 2. Find the surety company name and bond number on the state board's license detail page (CSLB, ROC, CCB, NCLBGC, etc. all publish this). 3. Bond status: typically Current, Insufficient, Canceled, or Expired. Only Current is acceptable. 4. Bond amount: typically $5,000-$25,000 for residential, higher for commercial. 5. If the bond shows Canceled or Insufficient, you have no first-dollar recovery if the contractor fails. Refuse to hire.

How to make a bond claim if needed: file directly with the surety company (name on the license page), submit contract, payment records, and evidence of failure. Surety has 30-90 days to investigate. Payment if approved, denial if not.

Insurance verification:

1. Insurance is NOT on file with the licensing board as a verifiable certificate. The board may show "insurance current" status, but this is the contractor's self-reported attestation, not a real-time check with the carrier.

2. The only reliable insurance verification is direct contact with the carrier:

a. Request a Certificate of Insurance (COI) naming YOU as certificate holder, with your project address. Insurers generate this in seconds — if the contractor provides a COI without your name and address, demand a fresh one.

b. Identify the insurer name and agent contact in the bottom-right of the COI.

c. Call the agent. Ask: "Is policy [number] in force as of today? Is the named insured [contractor name and entity]? Is the coverage type and limit as listed? Are there any pending cancellation notices?" This is a standard verification call.

d. Confirm general liability minimum $1M for residential projects above $20,000.

e. Confirm workers' compensation policy is in force and covers the qualifier plus any employees. Without workers' comp, an injured worker on your property can sue you directly.

3. Reasons a COI may be invalid even when it looks right:

- Policy was canceled for non-payment after the COI was generated. - Coverage limits are lower than required for your project. - Named insured does not match the contractor entity on your contract (the COI is for a different LLC). - The "agent" listed is the contractor's brother-in-law, not a licensed insurance agent. - The COI is fabricated (image-editor fraud).

4. Common fraud: COI for a policy that was canceled 4 weeks ago. Certificate looks current on its face. Only the insurer's records show the cancellation. Always call.

Workers' compensation specifics:

- Most states require WC for any contractor with employees. - Exemption certificates available for true sole proprietors with no employees. If the contractor claims exemption but has workers on your job, the exemption is invalid. - Verify at the state workers' comp board (NCCI search, state-specific databases, or via the licensing board's WC status). - Injured worker without WC = your homeowner's insurance is the first stop. Premiums increase, claims may be denied, and you may be personally liable for medical and lost wages.

Groundcheck (earthmove.io/trust) verifies bond status at the licensing board level (current/canceled/expired) and shows the surety company name. Groundcheck does NOT verify insurance certificates — insurance is a real-time, private-carrier check that cannot be done from public records. For insurance verification, call the insurer directly.

This is the most important Groundcheck limitation: a contractor can have a Clear Groundcheck verdict and a canceled insurance policy. Always call the insurer.