Contractor Compliance Checklist

A COI is a summary document — not the policy itself. General liability should be at minimum $1M per occurrence / $2M aggregate for most trades; roofing, pool work, and electrical typically warrant $2M per occurrence. Workers' compensation is equally critical: if a contractor's employee is injured on site without WC coverage, your organization may be named in the claim.

Don't stop at the expiration date. Check that your company is named as certificate holder, that the description of operations references the actual work being performed, and that the COI notes additional insured status. That notation alone is not sufficient — a separate additional insured endorsement (CG 20 10 or CG 20 37) is the document that actually modifies the policy and extends coverage to you.

A contractor can hand you a signed contract and a business card with an LLC name while that LLC has been administratively dissolved for two years. Verify entity status directly with the Secretary of State — it's free in every state and takes under five minutes. A dissolved entity cannot be sued as a company; you'd have to pursue the principals personally, which is significantly harder to enforce.

Also confirm there are no open judgments or mechanics liens associated with the contractor in your county. Prior clients recording liens is a strong signal about payment practices and project completion history — both of which affect your risk if this contractor walks off a job mid-project.

Any contractor paid $600 or more in a calendar year requires a 1099-NEC at year-end. Without a W-9 on file, you cannot complete that filing accurately — and late or missing 1099s carry IRS penalties. Collect the W-9 before the first payment, not before the project closes.

The most common W-9 issue: the entity name on the form doesn't match the name on the contract. Vendors operating under a trade name or DBA sometimes submit the assumed name rather than the registered legal entity name. That mismatch creates a problem at tax time. Confirm the W-9 entity name, the EIN, and the contract name are consistent before filing anything away.

Never accept a copy of a license as proof of current status. A license can expire, be placed on Delinquent status, or be revoked entirely — and the physical document will look identical either way. Verify directly in the state database: TDLR for electrical and HVAC in Texas, TSBPE for plumbing in Texas, DBPR for contractors in Florida, CSLB for contractors in California.

Also verify that the license classification matches the actual scope of work. An HVAC license doesn't authorize electrical work, and a general contractor license doesn't substitute for a specialty trade license. Confirm the name on the license matches the entity on your contract and COI — discrepancies signal either a different legal entity or an unlicensed individual doing business under a licensed company's name.

OSHA 10 is the baseline for most commercial jobsites; OSHA 30 is typically required for supervisors and foremen. Some public-sector projects require OSHA 30 for all workers on site. Verify the certification card date — OSHA 10 and 30 courses do not expire, but many general contractors and public agencies require completion within a specific number of years.

A written drug and alcohol testing policy on its own isn't sufficient — confirm the contractor actually has a testing program in place and that it covers pre-employment, random, and post-incident testing. If your project involves hazardous materials, confined space entry, or fall protection requirements, request documentation showing site-specific training in those areas.

Background check requirements vary by jurisdiction and project type. Residential work with access to occupied units often requires individual-level background checks for all workers who will be on site. Verify this against your state's laws and any requirements in your master contract or owner agreement before selecting a screening approach.

Reference checks are underused. Three professional references, specifically from clients with similar project types, will reveal more about a contractor's reliability and finish quality than any document in the compliance file. Ask each reference specifically about whether the contractor completed scope on schedule, how they handled disputes or deficiencies, and whether they would rehire.

Without a signed agreement, every term of the engagement — scope, price, timeline, liability allocation, and dispute resolution — is governed by whatever each party claims was agreed upon verbally. The indemnification clause deserves specific attention: language that says "arising from vendor's negligence" is significantly weaker than "arising from the vendor's work regardless of cause." Courts interpret ambiguous indemnification language differently, and the standard matters when a claim arises.

Never rely on the contractor's standard service agreement without review. It was drafted by their attorney to protect them. At minimum, confirm the agreement references your insurance requirements, names your company as additional insured, defines the scope with measurable deliverables, and includes a termination clause with defined notice requirements.