1. Are you licensed and insured for this specific trade?#
Never accept a verbal "yes." Ask for an active Certificate of Insurance (COI) sent directly from the broker showing general commercial liability and workers’ compensation coverage.
2. What is the payment schedule and deposit requirement?#
- Deposit: A reasonable initial deposit (typically 10–20%) to secure scheduling and order custom materials.
- Milestones: Progress payments released upon completion and inspection of defined phases.
- Holdback / Final payment: A final 10–15% held back until all punch-list items are finished.
Contractor hiring scorecard#
| Evaluation Criteria | Green Flag (Professional) | Red Flag (High Risk) |
|---|---|---|
| Licensing & Insurance | Active COI provided directly from insurance broker | Verbal assurance only; no written proof |
| Payment Structure | 10–20% deposit; milestone payments; final holdback | Large upfront payment (>30–50%) demanded |
| Permits | Contractor pulls permits in business name | Asks homeowner to pull permit as owner-builder |
| Change Orders | Written change order signed before extra work begins | Surprise additions tacked onto the final invoice |