Contractors and builders: what to verify before any construction project

Licensing and insurance: the baseline that cannot be skipped

General contractors are licensed at the state level in most states, with specific requirements varying by state. Some states license general contractors broadly; others require specialty licenses for electrical, plumbing, HVAC, and structural work regardless of who the general contractor is. Before signing a contract, verify the contractor's license number through your state contractor board, confirm the license covers the type of work being done, and check that it has not expired or been suspended.

Insurance coverage for contractors means general liability coverage (in case the work damages your property or a third party's) and workers' compensation coverage (in case a worker is injured on your property). Without workers' comp, a worker injured on your job can potentially make a claim against your homeowner's insurance. Ask for certificates of insurance, confirm they are current by calling the insurer directly, and ask to be named as an additional insured on the general liability policy.

Reading and negotiating a construction contract

A complete construction contract specifies: the exact scope of work (draw this from the bid documents, not vague language), the materials by brand and specification, the timeline with milestones, the payment schedule tied to those milestones, the process for change orders, who is responsible for cleanup and disposal, the permit responsibility (always the contractor's), lien waiver requirements, and warranty terms. Vague language in any of these areas creates room for disputes.

The change order process is particularly important to establish before work begins. Construction projects frequently encounter unforeseen conditions: a wall that hides rot, plumbing that needs rerouting, materials that are out of stock. How additional cost and time are handled, documented, and authorized should be agreed before the first nail goes in. Any change order above a minimal threshold should require a written document signed by both parties before the work continues.

Permits and inspections

Permitted work, inspected and approved by your local building department, means the work was done to code. Unpermitted work can create serious problems when you sell (required disclosure in most states, and buyers or their lenders may refuse unpermitted improvements), can void homeowner's insurance coverage for related claims, and can result in a correction order requiring the work to be redone. Permits should always be pulled in the contractor's name; if a contractor asks you to pull the permit yourself, that is a significant red flag.

Inspections during construction are your quality checks. Do not waive them. When an inspector approves the framing before drywall goes up, or the electrical before the walls close, you get independent verification that the work was done correctly at each stage. Contractors who want to rush past inspections are removing the quality checkpoints. Slow down if you need to; the inspector's approval is worth it.