How to Verify a Contractor's License, Bond, and Insurance in Detroit
Hiring a contractor in the Downriver Detroit area without checking their license and insurance is one of the most common mistakes homeowners make. Working with a trusted general contractor in Detroit, MI, ensures that proper licensing, bonding, and insurance are in place, reducing your legal and financial risks.
If something goes wrong during the project, your exposure depends directly on whether the contractor was properly licensed and insured before work started. A worker injury, a failed inspection, or a contractor who disappears mid-job each carries different risks, and all of them are harder to recover from without the right documentation in hand.
Call us at (734) 626-3067 to schedule a free consultation. We hold Michigan Residential Builder License #262300688 and carry both general liability and workers' compensation insurance on every project.
Why These Three Things Matter Before Any Work Starts
Licensing, insurance, and bonding each protect you from a different type of risk.
A license confirms the contractor has met the state's requirements to perform residential work legally in Michigan. Insurance, specifically general liability and workers' compensation, protects you if property is damaged or someone is injured during the project. A surety bond provides a financial backstop if the contractor fails to complete the work or causes damages that exceed their insurance coverage.
Not every contractor in Michigan is required to carry a bond, but all residential contractors are required to hold an active license. Skipping verification on any of these before signing leaves you exposed.
How to Verify a Michigan Contractor License
Michigan requires residential contractors to hold a license through LARA, the Department of Licensing and Regulatory Affairs. You can verify any contractor's license status at michigan.gov/lara.
To check a license, navigate to the LARA website, go to the license lookup tool, and search by contractor name or license number. The result shows you the license type, current status (active or inactive), and expiration date.
Ask your contractor for their license number before the first meeting. Any properly licensed contractor will provide it without hesitation. We hold Michigan Residential Builder License #262300688. You can verify it at michigan.gov/lara.
What Happens If You Hire an Unlicensed Contractor in Michigan
Hiring an unlicensed contractor in Michigan carries real consequences. Work performed by an unlicensed contractor may not pass municipal inspection, may not be covered by your homeowner's insurance in the event of a loss, and can create legal complications if you later need to hold the contractor accountable for defective work.
Michigan law also makes it harder to recover damages from unlicensed contractors because they are not subject to the same regulatory oversight as licensed ones. The Michigan Homeowner Construction Lien Recovery Fund provides some financial protection for homeowners, but eligibility requirements tied to licensing status apply. Knowing who you are hiring before work starts protects your options.
How to Verify General Liability Insurance
Ask the contractor for a certificate of insurance before signing any contract. The certificate should show the name of the insuring company, the policy number, the coverage amounts, and the policy expiration date.
If you want to be thorough, call the insurance company listed on the certificate directly to confirm the policy is currently active. Certificates can be falsified, and a five-minute call removes all doubt.
General liability insurance covers property damage and personal injury that occur during the project. Without it, you could be liable for damages caused by the contractor's work on your property.
How to Verify Workers' Compensation Coverage
Workers' compensation is a separate policy from general liability insurance. It covers medical costs and lost wages for workers who are injured on the job. If a contractor's worker is injured on your property and the contractor does not carry workers' comp, you may be held responsible for those costs.
Ask specifically for proof of workers' compensation coverage, not just general liability. They are two separate policies, and both should be current before any work begins on your property.
What a Surety Bond Covers and How to Check It
A surety bond is a financial guarantee that a contractor will complete the work they agreed to. If the contractor defaults on the project, the bond provides a source of recovery for the homeowner up to the bond amount.
Not all Michigan contractors are required to carry a bond, but contractors who do are demonstrating an additional layer of financial accountability. Ask your contractor whether they are bonded and request to see the documentation. If they are bonded, it is worth verifying that the bond is current with the bonding company.
Red Flags to Watch For
These are warning signs that a contractor may not be properly licensed or insured:
- Refuses to provide a license number or cannot recall it
- Says they are "in the process" of getting their license
- Provides a certificate of insurance but resists letting you call to verify it
- Quotes a price significantly below competing estimates, which can be a sign of cost-cutting on insurance premiums
- Asks you to pull your own permits rather than handling it themselves
Any one of these individually might have an innocent explanation. Together, they describe a contractor you should not hire.
Ask Directly and Watch the Response
The way a contractor responds to direct questions about licensing and insurance tells you as much as the documents themselves. A contractor who is properly set up will answer these questions without defensiveness or delay. Any contractor worth hiring has had this conversation before and expects it.
A contractor who becomes evasive, changes the subject, or tries to establish trust through personality rather than documentation is one who cannot back the conversation up with paperwork.
We carry Michigan Residential Builder License #262300688, along with general liability and workers' compensation insurance on every project. You can verify the license at michigan.gov/lara. We are glad to provide insurance documentation at any point in the process.
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