Many homeowners confuse general business registrations with trade licenses. Here is everything you must know to ensure legal and financial protection before work commences.
1. Trade License vs. Business Registration
A business tax certificate allows a company to operate, but does NOT certify technical competence in electrical, plumbing, or structural trades. Trade licenses require rigorous exams, verifiable apprenticeship hours, and continuing education.
2. Why Workers Compensation Protects Your Home
If an uninsured worker is injured on your property, your homeowner liability policy may be pulled into litigation. Never hire a contractor without verifying active workers comp coverage.
✓ Homeowner Action Checklist
- 1Verify state license number matches the legal entity name
- 2Confirm minimum $1,000,000 general liability coverage
- 3Require contractor to list you as additional certificate holder on large projects
- 4Ensure municipal building permit is posted conspicuously on jobsite