How to Hire a General Contractor: Step by Step

Here is how to hire a general contractor with confidence: confirm the state license, a certificate of insurance and bond details, then sign a written contract before paying anything. Each step ties to a record you can check.

The steps below are a sequence, not a ranking. Each one only works if the previous one is done. If you are still scoping the job, start with our home renovation planning checklist so every bidder prices the same work.

General contractor versus subcontractor

A general contractor runs the whole job, while a subcontractor performs one specialized trade. According to a Chicago renovation guide, the general contractor oversees subcontractor teams that carry out specialized tasks, procures materials and obtains permits. A second hiring guide adds that the general contractor retains subcontractors as needed, so you deal with one party rather than hiring each trade yourself.

This split decides whom you vet. You are hiring and checking the general contractor, and that company answers to you for the trades beneath it. Hiring a plumber or electrician directly makes you the coordinator, which suits a single-trade repair better than a multi-trade remodel.

The verification sequence

Work through the stages below in order and keep a note of what each record showed. Drop any candidate who fails a stage rather than hoping a later stage compensates.

Find candidates and check their reputation

Start with the state licensing board, which the hiring guide notes is usually managed under the state’s consumer protection agency. It also points to professional trade associations, notably the National Association of Home Builders (NAHB) and its state chapters, as a source of objective guidance. Better Business Bureau profiles carry ratings on a scale of A+ to F, which is a useful screen but not a substitute for the license record.

Before shortlisting anyone, check complaints with the Better Business Bureau and the state attorney general’s office, as Stillman Bank’s hiring tips advise. A complaint history that matches what a bidder tells you about past disputes is worth more than polished references.

Check the contractor license

Search the live state record rather than trusting a printed card, a proposal statement or an old screenshot. The South Carolina example is instructive: licensing is generally required for regulated commercial work when total construction cost exceeds $10,000. Thresholds and rules differ by state, and some cities add their own layer. In Chicago, for instance, general contractors must obtain a license from the City of Chicago Department of Buildings, per the Sweeten guide.

An “active” status is not the final answer. The record must belong to the same legal business, cover the proposed classification and support the complete project value. Compare four items on the lookup against your paperwork:

• Legal license holder: the name should match the contract, invoice and the name you are asked to pay.
• Classification: the licensed work type must cover what you are hiring them to do.
• Group limit: in South Carolina, a general contractor group one license tops out at a $100,000 maximum bid, while group five is unlimited, so a contractor must be licensed at a level that fits your job’s value.
• Qualifying party: the certified person responsible for directing or reviewing work in a classification.

The board’s group depends on financial documentation or an approved Board surety bond, and an applicant must meet either the working-capital or the net-worth requirement, not both. That is why the group limit is a real signal of financial capacity rather than a formality.

Verify insurance and bonding

Ask for a certificate of insurance, then verify with the insurance company that the policy is still in effect, as Stillman Bank recommends. A certificate handed over on paper only proves a policy existed on the day it was printed. An Orchard hiring guide puts the baseline simply: make sure the contractor is licensed, insured and bonded.

Requirements vary by place. Chicago’s general contractor license, for example, requires that the insurance provider be rated B+ or better. If you skip the check, the exposure is yours: the hiring guide warns that you can be financially liable if a worker is injured on your property or your property is damaged.

Put everything in writing

The contract should clearly outline the timeline for completion, material and equipment specifications and the parties involved, per the Orchard guide. Match the completion date to a realistic home renovation timeline instead of accepting the first date offered.

• Permits: make the contractor responsible for them in the contract. Our guide on what home renovations require a permit explains which jobs need one.
• Final payment: withhold it until after the final building inspections are completed, as Stillman Bank advises.
• Changes: any change to the contract should be in writing, dated and initialed by you and the contractor.

Contractor red flags

The warning signs below come from the licensing board’s guidance and the hiring guides above. Any one of them is reason to pause and re-check the records.

• Payment to an unrelated party: if you are asked to pay a person or entity that is not the licensed business on the contract, stop. The license holder, contract, invoice and payment name should all match.
• An inactive license described as almost renewed: an inactive record means the contractor is not currently licensed, whatever the explanation.
• Jobs split into smaller contracts: do not split one job solely to appear below the licensing threshold. A contractor proposing this is steering around the rule meant to protect you.
• Insurance you cannot verify: a certificate the insurer will not confirm leaves you carrying the liability described earlier.

Verification steps compared

These rows draw on South Carolina licensing board guidance for the license and bond checks and on Stillman Bank’s hiring tips for insurance and contract terms.

Frequently asked questions