Does a contractor need both general liability and workers' compensation?

If they have any employees, yes — GL covers damage to your property and injuries to others, while workers' comp covers the contractor's own workers if they're hurt on the job. A true one-person operation may not be legally required to carry workers' comp, but should still carry GL.

What's the difference between a contractor being insured and being bonded?

Insurance pays out for damage or injury the contractor's work causes. A bond is a guarantee to the state and consumers that the contractor will follow licensing law, and you file against it if they don't — it's a much smaller, narrower protection than a real insurance policy.

How do I know if a contractor's insurance certificate is real?

Call the insurance company listed on the certificate of insurance directly and ask them to confirm the policy number, coverage dates, and that it's currently active. Don't rely on a PDF the contractor emails you, since certificates can be outdated or altered.

What happens if I hire an uninsured contractor and something goes wrong?

You may be responsible for property damage or injury costs that a proper GL policy would have covered, and your own homeowner's insurance may not step in since the work was done by an uninsured party. Your main recourse becomes a direct lawsuit against the contractor, which is often slow and uncertain.

What Insurance Should a Contractor Have? GL, Bonds, and Comp

Before a contractor sets foot on your property, three documents should already exist: a general liability policy, a workers' compensation certificate if they have employees, and in many states, a license bond. None of these protect the contractor primarily — they protect you, and skipping the check is how homeowners end up paying for someone else's accident.

What Does General Liability Insurance Actually Cover?

General liability (GL) insurance pays out when the contractor's work damages your property or injures a third party — a dropped tool that cracks your tile floor, a fire started by a soldering torch, a subcontractor's ladder that puts a hole in your ceiling. It does not cover the contractor's own employees getting hurt, and it does not cover shoddy workmanship itself (that's a warranty issue, not an insurance one). In many states, carrying GL is a condition of holding a contractor's license at all, not an optional add-on (Angi).

What Is Workers' Compensation, and When Is It Required?

Workers' comp covers medical bills and lost wages if one of the contractor's employees is injured on your job site. If a contractor has employees, most states require this coverage by law — and it matters to you directly: without it, an injured worker (or their attorney) can potentially pursue the homeowner whose property they were injured on, since your homeowner's insurance typically isn't built to absorb someone else's workers' comp claim. A true solo operator with no employees may legally skip workers' comp in some states, but a crew of any size should have it.

What Is a License Bond, and How Is It Different From Insurance?

A surety bond isn't insurance for the contractor — it's a guarantee to consumers and the state that the contractor will follow licensing law. If they don't (unpaid subcontractors, code violations, abandoned jobs), you can file a claim against the bond to recover some of your loss, up to its face value. Bond amounts are set by the state and vary widely. California, for example, requires a $25,000 contractor's bond, with LLC contractors carrying an additional $100,000 LLC bond on top of it (CSLB). A bond is a backstop of last resort, not a substitute for insurance — it's usually a fraction of what a real property-damage or injury claim would cost.

Coverage	What it covers	Who it protects	Typically required when
General liability	Property damage, third-party injury	You and your property	Almost always, to hold a license
Workers' compensation	Employee medical bills, lost wages	The contractor's workers (and indirectly you)	Contractor has employees
License bond	Consumer losses from license-law violations	You, up to the bond's face value	Set by state licensing board

What Happens If a Contractor Shows Up Without Coverage?

This is the part homeowners underestimate. If an uninsured contractor or their crew gets hurt on your property, you can be named in a claim for their medical costs. If their work causes damage — a burst pipe, a fire, a structural mistake — and there's no GL policy behind it, your only recourse is suing the contractor directly, which is slow, expensive, and often fruitless if the business has few assets. Your own homeowner's policy may deny the claim or subrogate against you once it learns the work was done by an uninsured party. The FTC's consumer guidance puts license and insurance verification at the top of its pre-hire checklist for exactly this reason.

How Do You Actually Verify a Contractor's Insurance?

Asking "are you insured?" isn't verification — plenty of contractors answer yes without a current policy in hand. Instead:

Ask for a certificate of insurance (COI) listing you as certificate holder, with policy numbers and expiration dates.
Call the insurance company directly (not just the contractor) to confirm the policy is active and covers the type of work being done.
Confirm coverage limits are reasonable for the job — a kitchen remodel and a full ADU build carry very different exposure, and a policy with a low per-occurrence limit may not fully cover a serious loss.
Ask whether subcontractors are covered under the general contractor's policy or need their own — this matters most on larger jobs where multiple trades are on site.
Check the contractor's license status and bond with your state licensing board; our guide on how to check a contractor's license walks through that lookup state by state.

The same logic holds whether you're vetting a general contractor, a plumber, or a landscaper — trade-specific licensing boards vary, but the insurance and bond questions don't change.

What to Do About It

Before you sign a contract, request a COI and a bond number in writing, and don't schedule work until both check out. If a contractor pushes back on providing this or seems annoyed by the ask, treat that as information — a properly insured contractor produces this paperwork routinely, because clients ask for it constantly. This is also where getting more than one quote pays off beyond price: comparing multiple contractors side by side means you're not just comparing numbers, you're comparing who actually has their paperwork in order, and you can tell a fair price from a risky one instead of just hoping the first bid you got was reasonable.