How can I verify that a contractor is licensed and insured?

Dear Consumer Ed:

How can I verify online that a home improvement contractor in Georgia is licensed and insured?

Consumer Ed says:  

Contractors who offer or perform residential or general contractor services for compensation in Georgia must be licensed in accordance with the laws and rules that regulate this profession. To verify that a contractor is licensed, go to the Georgia Secretary of State’s website (sos.ga.gov). From the main menu, choose "Licensing," then click on "Licensee Search." Under the “Building & Contractors” tab, click on “Residential and General Contractors.” Please note that certain specialty occupations such as roofers, painters, drywall contractors, and repair handymen are not required to be licensed by the state.  

Consumers can report an unlicensed contractor to the Secretary of State’s Licensing Board by visiting https://sos.ga.gov/form/licensing-complaint-unlicensed-individual-or-unlicensed-facilityschool-form.

To find out whether a contractor or other company holds a business license with the State of Georgia, consumers can again go to the Georgia Secretary of State’s website. Choose “Business” and then click on “Search for a Business.” From there, you can look up any business registered with the state of Georgia by searching for the business name, control number, registered agent’s name, or the name of an officer of the business.

Under Georgia law, in most instances, businesses that act as residential or general contractors are required to carry a general liability insurance policy. Furthermore, if the business has three or more employees, it must also have workers’ compensation insurance. The easiest way to find out if a contractor, or any other business, is covered by an insurance policy is to check the company’s website. The business should have information on its site that discloses its public or general liability policy. If there is no such information, consumers should contact an agent of the company, either listed by them or found with the Georgia business search portal described above and ask the agent if the company carries insurance.

In addition to verifying that a contractor is licensed and insured, here are some additional tips to consider before hiring someone to do home improvement work:

• Ask friends, neighbors, and coworkers for referrals.
• Contact local trade organizations, such as the Home Builders Association of Georgia, to find contractors in your area.
• Check with the Better Business Bureau to see if there are any complaints against the business.
• Ask for three or four references of customers who had projects similar to yours and check them out. 
• Get written bids from several contractors. Be skeptical if the bid is too low. Cheaper is not necessarily better.
• Always insist on a contract for work to be performed, with all guarantees, warranties, and promises in writing. Agree on start and completion dates and have them written into the contract.
• Consider setting payment terms in conjunction with completed stages of the job.
• When the job is done, make sure it matches the terms of the contract.
• Never pay for the entire project before the work begins. And do not pay more than 25% or, at most, one-third of the total cost as a down payment. Remaining payments should be tied to completion of specified amounts of work.

For more information about residential and general contractors, go to the FAQ page under the Secretary of State’s “Residential and General Contractors” licensing section.

Submit your own question to Consumer Ed.  Remember…we do not give legal advice. Always consult a lawyer about legal issues.

Related to: 

• House or Apartment