How to Verify a Contractor's Insurance (Step by Step)

Hiring a contractor without verifying their insurance is one of the most expensive mistakes a homeowner can make. If an uninsured worker gets hurt on your property, or their work damages a neighbor's home, you could be personally liable for hundreds of thousands of dollars. A valid contractor license doesn't guarantee current insurance coverage, and a verbal promise means nothing when someone is filing a claim.

The good news is that verifying contractor insurance takes about 15 minutes once you know what to ask for and what to look at. This guide walks through the types of insurance contractors should carry, how to read a Certificate of Insurance, how to confirm it's real, and the red flags that should make you walk away.

What types of insurance should a contractor have?

At minimum, require general liability insurance and workers' compensation from any contractor you hire. General liability — typically $1 million to $2 million in coverage — pays for property damage or injury caused by their work. Workers' comp covers medical costs if a crew member is hurt on your property; without it, an injured worker can sue you directly as the property owner.

Not every contractor needs every type of insurance, but there are two policies that matter for almost every residential project. A third becomes important for larger jobs.

• General liability insurance.This is the baseline. It covers property damage and bodily injury caused by the contractor's work. If a roofer drops a tool through your skylight, or a plumber floods your basement, general liability pays for the damage. Most states require contractors to carry between $500,000 and $1 million in general liability coverage, but many reputable contractors carry $1 million to $2 million.
• Workers' compensation insurance.This covers medical bills and lost wages if a worker is injured on the job. In most states, any contractor with employees is legally required to carry workers' comp. This one matters more than most people realize, even for small crews. More on that below.
• Commercial auto insurance.If the contractor drives company vehicles to your job site, their personal auto policy likely won't cover accidents that happen during commercial use. This is less critical for you to verify, but worth asking about for larger projects with heavy equipment or material deliveries.

Some specialty contractors also carry professional liability insurance (sometimes called errors and omissions), which covers design or specification mistakes. This is more common with architects and engineers than general contractors, but it's worth asking about if your project involves significant design work.

How do you request a Certificate of Insurance from a contractor?

Ask the contractor to have their insurance company send a Certificate of Insurance (COI) directly to you before you sign anything. Receiving it directly from the insurer eliminates any possibility of tampering. For larger projects, also request to be listed as an "additional insured" on their general liability policy — this is standard practice and costs you nothing extra.

A Certificate of Insurance (COI) is a one-page document issued by the contractor's insurance company that summarizes their coverage. It's the standard way to prove insurance in the construction industry, and any legitimate contractor should be able to provide one within a day or two.

Here's how to ask for it:

1. Ask before signing a contract.Make it a condition of hiring. A simple request works: "Can you send me a current Certificate of Insurance before we finalize the contract?"
2. Request it directly from the insurer. The most reliable approach is to ask the contractor to have their insurance company send the COI directly to you. This eliminates any chance of the document being altered. The contractor simply calls their agent and asks them to issue a certificate to your name and address.
3. Ask to be listed as an additional insured.For larger projects, request that you be added as an "additional insured" on their general liability policy. This gives you direct rights under their policy if a claim arises from their work on your property. There is usually no extra charge for this.

If a contractor hesitates, makes excuses, or says their insurance is "being renewed," treat that as a serious warning sign. A contractor with active insurance can produce a COI with a single phone call to their agent.

How do you read a Certificate of Insurance?

Most COIs use the standard ACORD 25 format. Focus on five things: your name in the Certificate Holder box, policy effective and expiration dates (coverage must last through your project's completion), general liability limits of at least $1 million per occurrence, the contractor's business name matching what's on your contract, and the insurance company's name — which you should be able to look up independently.

Most COIs follow the standard ACORD 25 format, which is used industry-wide. The form can look dense, but there are only a few fields that matter. Here's what to focus on:

• Certificate holder (your name).Your name or your company name should appear in the "Certificate Holder" box at the bottom left of the form. If you requested additional insured status, that should be noted in the description of operations section or attached as an endorsement.
• Policy effective and expiration dates.Check that the policy is currently active and won't expire before your project is scheduled to finish. If your renovation runs through October but the policy expires in August, you have a gap.
• Coverage types listed.Look for "Commercial General Liability" and "Workers Compensation" in the coverage sections. Each type will have its own row with separate policy numbers and dates.
• Coverage limits.General liability should show at least $1 million per occurrence. The general aggregate (the maximum the policy will pay across all claims in a year) should be at least $2 million. Workers' comp limits are typically set by state law and shown as statutory limits.
• Named insured.The contractor's business name should match the name on the contract you're signing. If the COI lists "Smith Renovations LLC" but your contract is with "John Smith," ask why. Sometimes it's just a DBA situation, but it could mean the insurance doesn't actually cover the entity you're contracting with.
• Insurance company name and rating. The insurer should be a company you can look up. You can check their financial rating through AM Best to make sure they're financially stable enough to pay claims. A rating of A- or better is solid.

How can you tell if a Certificate of Insurance is real?

The only reliable way to verify a COI is to call the insurance company directly — find the insurer's number through an independent search, not from the certificate itself, since a forged document could list a fake number. Fraudulent certificates are more common than most homeowners expect: some contractors photoshop dates, inflate coverage amounts, or buy a policy to get the certificate and then cancel it to save money.

A COI is only useful if it's legitimate. Fraudulent certificates are more common than most homeowners expect. Some contractors photoshop old certificates, change dates, or inflate coverage amounts. Others buy a policy, get the certificate, then cancel the policy to save money.

Here's how to confirm what you're looking at is real:

1. Call the insurance company directly.Find the insurer's phone number independently (not from the COI itself, since a fake certificate could list a fake number). Search for the insurance company online, call their verification line, and ask them to confirm the policy number, named insured, coverage amounts, and effective dates. This takes five minutes and is the single most reliable step you can take.
2. Call the agent or broker listed. The COI includes the name and contact info of the insurance agent or broker who issued it. Call them separately and ask them to confirm the certificate is valid and was issued by their office.
3. Request the certificate come directly from the insurer. As mentioned above, having the insurance company send the COI straight to you eliminates the possibility of tampering. This is the gold standard.
4. Check for cancellation notices. Ask the contractor to have you listed for cancellation notices on the policy. This means the insurance company will notify you if the policy is canceled or not renewed during your project. This is standard practice on commercial projects and perfectly reasonable to request for residential work too.

What insurance red flags should you watch for?

Beyond fake certificates, watch for contractors who offer discounts for skipping permits (a sign they're avoiding insurance requirements too), COIs that look blurry or have inconsistent fonts (signs of alteration), general liability limits below $500,000, and policies expiring soon with no clear renewal plan. None of these alone is definitive, but multiple red flags together are a strong signal to walk away.

Beyond fake certificates, there are several warning signs that suggest a contractor's insurance situation is not what it seems:

• They offer a discount for not pulling permits or "keeping it off the books."This usually means they're avoiding insurance requirements along with everything else.
• The COI looks like a low-quality photocopy or scan. Legitimate certificates are issued digitally and look clean. Blurry text, misaligned fields, or inconsistent fonts are signs of alteration.
• Coverage amounts are unusually low. A general liability policy with a $100,000 limit is essentially meaningless for any project that involves structural work, roofing, electrical, or plumbing. One hospital visit from a workplace injury can exceed that.
• The policy expires soon and they can't explain the renewal. If the policy expires in two weeks and the contractor has no answer about renewal, they may be planning to let it lapse.
• They say "I'm covered under the homeowner's policy."This is not how it works. Your homeowner's insurance does not cover a contractor's liability or their workers' injuries. A contractor who says this either doesn't understand insurance or is hoping you don't.
• They refuse to add you as additional insured. There is rarely a legitimate reason for this refusal. If the insurance is real and active, adding a certificate holder or additional insured is routine.
• The insurance company on the COI doesn't come up in any searches.If you can't find the insurer listed on the certificate through a basic web search or through your state's department of insurance, the certificate may be fabricated.

Does a contractor who "works alone" still need workers' comp?

Often yes. Many states require workers' compensation even for one-person operations in high-risk trades like roofing and electrical. More importantly, if a solo contractor brings even a single helper to your job site, that person is typically considered an employee under state law — regardless of whether they're paid in cash. Without workers' comp, an injured worker retains the right to sue you personally as the property owner.

This is one of the most misunderstood areas of contractor insurance. Many contractors claim they don't need workers' compensation because they work alone or only use subcontractors. Here's why that claim often doesn't hold up:

• Many states require workers' comp for sole proprietors in construction.The rules vary by state, but several states require workers' comp coverage even for one-person operations in high-risk trades like roofing, electrical, and demolition. Don't take the contractor's word for it. Check your state's requirements.
• If they hire day laborers or helpers, they have employees.Some contractors claim to work alone but bring a helper to the job site. In most states, that helper is considered an employee for workers' comp purposes, regardless of whether they're paid in cash or called an "independent contractor."
• Subcontractors without their own workers' comp may fall under the general contractor's policy.If a general contractor hires subcontractors who lack workers' comp coverage, the general contractor (and potentially you as the property owner) could be liable for their injuries.
• Without workers' comp, an injured worker can sue you.Workers' compensation is a no-fault system that trades the worker's right to sue for guaranteed benefits. Without that system in place, an injured worker retains the right to file a personal injury lawsuit directly against the property owner. This is how homeowners end up with six-figure judgments from projects that cost $5,000.

The safest approach is to require a workers' comp certificate from every contractor, regardless of crew size. If your state allows a legitimate exemption for sole proprietors, the contractor should be able to show you their signed exemption form or waiver filed with the state. A verbal claim of "I don't need it" is not enough.

The bottom line

Verifying contractor insurance comes down to three things: request a Certificate of Insurance before signing a contract, read it carefully to confirm the coverage types, amounts, and dates are adequate, and call the insurance company directly to verify it's real. The whole process takes about 15 minutes and costs nothing.

The contractors who are properly insured will have no problem producing documentation. The ones who push back, delay, or try to explain why insurance isn't necessary are the ones you need to walk away from. No amount of savings on a bid is worth the financial exposure of hiring an uninsured contractor.