The final reference you always check is your contractors’ license and insurance status. This step could fall anywhere in the sequence, but I save it for last since it is the least likely of the four steps to rule out a contractor. A simple online search through your state’s contractor licensing board confirms the legitimacy of the license and also raises potential red-flags should they exist.
Why is a contractor’s license important? Certainly not because of the knowledge it tests. It’s impossible for a test to gauge a contractors true abilities (this is why steps 1, 2 and 3 are so important!) The most important factor is, should a legal dispute arise, using a non-licensed contractor makes it nearly impossible to win a judgment. The law puts the onus on you to hire a licensed contractor, and if you decide not to, well, the law shows little sympathy.
Another nice element of the licensing process is most licensing boards also confirm workers comp insurance. Additionally, ask your contractor for a copy of their general liability policy, and perhaps ask to be listed as “additionally insured” on the policy. Having these documents in hand protects you and sends a message to Company X that you know how to protect yourself. Always good to have this in the back of their mind.
In the end, what is the true reason for checking references? Simple: So you can find some of the many fantastic contractors this world has to offer. Once a contractor passes the 4-step test, you can develop a longstanding, healthy, productive and pleasant working relationship. This is the ultimate goal!
Step 1. Do their Biggest Fans Love Them?
Step 2. Are Their Most Recent Clients Happy?
Step 3. Do Their Suppliers Tolerate Them?
Step 4. Are the Feds Hunting Them?