What does a "Caution" verdict on Groundcheck mean?

Caution is the third tier on Groundcheck (Clear > Conditional > Caution > Critical > Unverifiable). It is the "yellow alert" — proceed only if you must, and with maximum contract protection.

Triggers for Caution:

1. One or two current open mechanics' liens against the contractor. Active liens from subs or suppliers indicating current non-payment.

2. Three or more Serious OSHA citations in the last 5 years, even if abated. Pattern indicates ongoing safety culture issues.

3. BBB complaint pattern with multiple unresolved disputes in the last 24 months.

4. Recent Chapter 11 bankruptcy (in progress or concluded within last 24 months). The contractor is reorganizing — may emerge successfully or may liquidate.

5. License recently suspended and then reinstated. The board took action against the contractor and the contractor satisfied conditions for reinstatement. Underlying conduct still warrants caution.

6. Multiple address changes or entity name changes in the last 36 months that fall short of a full phoenix pattern.

7. Out-of-state contractor with no in-state foreign-entity registration but valid in-state license. Administrative gap that creates lien-rights and litigation issues.

8. Workers' comp showing Lapsed (current period) or recent gap.

9. One major court judgment against the contractor in the last 3 years, unpaid or paid late.

10. State Attorney General consumer-protection complaint history without formal enforcement action.

What to do with a Caution verdict:

1. Default position: walk away if you have alternative contractors. Caution-verdict contractors fail at meaningfully higher rates than Clear/Conditional ones.

2. If you must proceed (e.g., specialty trade with no alternatives, or all bids came in Caution-or-worse):

- Smaller scope first. Do a $10,000 phase to evaluate. - Aggressive milestone payment structure. 5-10% deposit max, then payments tied to permit inspections, not calendar dates. - Joint checks for all subcontractor payments above $2,500. - Lien releases required at every payment, no exceptions. - Direct insurer verification, repeated monthly during the project. - Holdback minimum 15% retained until 60 days after final inspection. - Enable Groundcheck monitoring throughout the project. - Daily or weekly photo logs of work progress. - Written change-order process with no implicit approvals. - Lien-bond posting in your contract (some jurisdictions allow this to protect against future lien filings).

3. Engage a construction attorney for any project above $50,000 with a Caution verdict. The marginal cost of $1,500-$3,000 in legal review is meaningful insurance against project failure.

4. Document everything. If the project fails, the documentation supports a strong recovery position.

5. Consider an Owner's Representative or independent project manager. A neutral third party who oversees the contractor's work and holds the contractor accountable to the contract terms. Cost: 4-8% of project value. Worth it for Caution-verdict contractors on large projects.

6. Reduce or eliminate any front-loaded payments. The Caution signals frequently correlate with cash-flow distress; do not finance the contractor.

Caution vs Critical:

- Caution: significant signals warranting extreme caution. Some Caution-verdict contractors complete projects successfully — but at higher failure rates. - Critical: signals strong enough to recommend "do not hire." Very few Critical-verdict contractors complete projects without major issues.

Caution vs Conditional:

- Conditional: minor or older issues that warrant elevated diligence but normal contract terms. - Caution: significant active issues that warrant maximum protection or walking away.

The verdict tier ordering is logarithmic, not linear. Caution is roughly 5x more risky than Conditional, and Critical is roughly 5x more risky than Caution. Each step up in the verdict represents a major shift in probability of project failure.

Groundcheck (earthmove.io/trust) returns Caution verdicts with detailed citations to underlying records. Read the records before proceeding. The free tier shows headline triggers; Deep Dive ($19) includes the full citation detail.