How to Verify a Contractor Is Licensed and Insured: Complete Checklist

Why Verification Matters Now: Altadena's Fraud Climate

Contractor fraud reports rose 38% between 2023 and 2025, according to the National Insurance Crime Bureau — and the single most common lie scammers tell is also the easiest to fake: that they are "licensed, insured, or bonded." Legal analysts at Justia list falsified credentials among the most documented home-repair scam tactics, which means a verbal assurance means nothing until you confirm it yourself.

For Altadena homeowners, this is not an abstract risk. The Eaton Fire put this community squarely in the crosshairs of what NICB President and CEO David J. Glawe calls criminals who "recognize those moments of vulnerability as opportunities for financial exploitation." In January 2025, the NICB deployed special agents to Southern California wildfire regions specifically to investigate contractor fraud targeting displaced homeowners — a clear signal of how serious the threat is here.

California raises the stakes further. Under CSLB rules, contracting without a license in a declared disaster area is a felony — not a fine, not a citation, a felony. Yet unlicensed operators still flood disaster zones, betting that desperate homeowners will skip the checks. CSLB Registrar David Fogt's guidance is blunt: it is understandable to want to rebuild quickly, but "it's important not to rush the process and hire the first contractor who comes along."

The math behind a legitimate license explains why faking one is tempting. A real CSLB licensee must pass exams, document at least four years of journey-level experience, carry a license bond, and clear a criminal background check. A scammer with a printed business card skips all of it. Here is what a forged credential typically hides:

• No license bond, leaving you with no recourse when work goes wrong
• Lapsed or nonexistent liability insurance, shifting injury and damage risk onto you
• No workers' compensation, exposing you to claims if a worker is hurt on your property
• A felony record for contracting in a declared disaster area — and a paper trail that vanishes with your deposit

The Los Angeles County Department of Consumer and Business Affairs recommends preferring contractors with prior fire-damage experience — one reason Altadena ADU Builder highlights firms like JMB Builders LLC (CSLB #1103479), whose Eaton Fire rebuild work is documented publicly. But the lesson of this fraud climate applies to every hire: never take a contractor's word for anything you can verify in five minutes yourself. The checklist that follows shows you exactly how.

Step 1: Verify the CSLB License (It's Free and Takes 5 Minutes)

Before you hand a contractor a deposit — or worse, sign a rebuild contract — take five minutes to check their license. It's free, it's official, and it's the single fastest way to filter out the fraudsters. Contractor fraud reports jumped 38% from 2023 to 2025, and one of the most common scams is simply falsely claiming to be licensed, insured, or bonded.

California makes the rules straightforward. Any job of $1,000 or more requires a CSLB license, and a license is also required for smaller jobs that involve workers or permits. That means virtually any ADU project, garage conversion, or Eaton Fire rebuild in Altadena falls squarely under state licensing law.

Here's what a CSLB license actually certifies. To earn one, a contractor must verify at least four years of journey-level experience, pass trade and law exams, carry a license bond, and clear a criminal background check. In other words, the license number is more than paperwork — it's proof of tested competence and financial accountability.

How to run the lookup:

• Go to www.cslb.ca.gov and search by license number, business name, or the individual's name — or call 800-321-2752.
• Confirm the license is active, not expired, suspended, or revoked.
• Check the classification (a "B" general building license covers ADU construction) and any disciplinary actions on record.
• Verify that the business name on the license matches the name on your contract exactly. If you sign with "JMB Builders LLC," the CSLB record must show that same entity — a mismatch means you may have no legal recourse against the licensed party.

That last point matters more than most homeowners realize. If a salesperson works for a licensed company but asks you to sign a contract with a different or unlicensed business name, walk away. For context, a legitimate Altadena builder like JMB Builders LLC (CSLB #1103479) — a paid featured listing on this guide — publishes its license number openly, and you can confirm it yourself in the CSLB database in under a minute.

The stakes are especially high in Altadena right now. It is a felony to contract without a license in a declared California disaster area, and the NICB deployed agents to Southern California wildfire regions in January 2025 specifically to investigate contractor fraud. CSLB Registrar David Fogt's advice to disaster-affected property owners is blunt: don't rush the process or hire the first contractor who comes along — hire only licensed contractors and check their qualifications.

If the lookup returns anything other than an active license matching the contract name, stop and keep looking. A five-minute check protects a six-figure investment.

Step 2: Confirm Insurance and Bond Directly — Not by Word of Mouth

"Trust me, we're fully insured" is one of the most expensive sentences a homeowner can accept at face value. The New Hampshire Insurance Department puts it bluntly: verbal assurances that a contractor is "insured" are not sufficient — and that principle applies everywhere, including Altadena.

The reason is simple. A certificate of insurance is only a summary document, not proof of active coverage. Policies can be canceled or lapse, meaning a certificate can easily outlive the policy it describes. Falsely claiming to be licensed, insured, or bonded is a documented scam pattern, which is why independent verification matters before you sign anything.

Here's how to verify properly:

• Have the insurer send the certificate directly to you — not through the contractor. A document emailed by the contractor could be altered or outdated; one sent straight from the insurance carrier is far harder to fake.
• Confirm the coverage is currently active by contacting the insurer directly, since certificates alone don't guarantee a policy hasn't lapsed.
• Verify workers' compensation through the free Electronic Workers Compensation Coverage Verification system at ewccv.com — especially important for any ADU project where workers will be on your property.
• Consider asking to be named as an additional insured on the contractor's liability policy, which gives you direct notice if coverage changes.
• Call the surety company to confirm the contractor's bond is current, not just that a bond exists on paper.

As for coverage levels, use common benchmarks as general guidance rather than legal requirements: one widely cited standard suggests at least $1,000,000 per occurrence and $2,000,000 aggregate in general liability coverage for contractors. Treat these as a starting point for conversation with the insurer, not a substitute for confirming the actual policy.

This step matters more in Altadena right now than it might otherwise. With NICB agents deployed to Southern California wildfire regions to investigate fraud, and fraudulent contractors targeting fire-affected communities, an ADU builder's insurance paperwork deserves the same scrutiny as their license. When we evaluate builders for this guide — including JMB Builders LLC (CSLB #1103479), a licensed general contractor handling ADUs and Eaton Fire rebuilds — the expectation is the same: credentials you can confirm independently, not claims you have to take on faith.

One final note: keep copies of every certificate, confirmation email, and surety call date in your project file. If a dispute or claim arises mid-build, that paper trail is what protects you — and it costs you nothing but a few phone calls today.

Red Flags Before You Sign: California's Payment and Contract Rules

If a contractor pushes any of the moves below, walk away — no matter how good the price sounds. Contractor fraud reports rose 38% from 2023 to 2025, and falsely claiming to be licensed, insured, or bonded is a documented scam pattern, so what happens before you sign matters as much as the work itself.

California law gives you clear tripwires. The state caps down payments at $1,000 or 10% of the contract price, whichever is less — anything larger violates the CSLB's rules for hiring contractors. Cash-only demands are another classic warning sign, as are requests for full payment or large sums up front.

Watch for these red flags before signing anything:

• A down payment above $1,000 or 10% of the total, or demands for cash-only payment
• Contracts with blanks or incomplete terms, or refusal to provide a written contract at all — California requires one for any job over $500
• Pressure to sign immediately or door-to-door solicitation, a tactic the NICB specifically warns about in wildfire-affected regions
• Requests to sign an Assignment of Benefits (AOB) agreement, which can transfer your insurance claim rights to the contractor
• Asking you to pull permits in your own name — a legitimate licensed contractor handles permitting for the work they perform

The pressure tactics matter more than ever in Altadena right now. After catastrophic events, "fraudulent contractors pour into hard-hit communities," according to NICB president David J. Glawe, and the agency deployed investigators to Southern California wildfire regions in January 2025. It is a felony to contract without a license in a declared California disaster area, so an unlicensed bidder isn't just risky — they're operating illegally.

One more protection homeowners often miss: lien waivers. If your contractor fails to pay subcontractors or suppliers, those unpaid bills can become a mechanic's lien against your home even if you paid the contractor in full. Before releasing final payment, request lien waivers from every subcontractor and material supplier involved in the project, a step recommended in homeowner guidance on contractor verification.

For larger projects like an ADU, these rules compound. A garage conversion or backyard unit in Altadena will run well past the $1,000 licensing threshold and the $500 written-contract requirement, so every payment and term should be documented from day one. At Altadena ADU Builder, we tell homeowners the same thing we'd tell family: slow down, verify the license at cslb.ca.gov, and never let anyone rush your signature.

Want a second set of eyes on your ADU plans? Our free feasibility consultation includes a cost quiz and a concept render — and yes, we'll walk you through verifying any builder's CSLB credentials before you commit to anything, including ours.

Hiring with Confidence in Altadena: Your Next Step

You've done the research, checked the credentials, and know the red flags. Now it's time to put that diligence into practice — because in a post-fire market, the difference between a smooth rebuild and a costly mistake often comes down to how carefully you vet before you sign.

Start with the basics both LA County and state regulators recommend: get at least three bids before choosing a contractor, and prefer builders with documented fire-rebuild experience. Contractors who have navigated Eaton Fire rebuilds understand the local permit landscape, insurance coordination, and the specific challenges Altadena homeowners face right now.

Before signing anything, run the full checklist one final time:

• Verify the CSLB license at www.cslb.ca.gov or by calling 800-321-2752, and confirm the business name on the license matches the contract
• Request certificates of insurance sent directly from the insurer — verbal assurances are not sufficient
• Confirm the down payment is capped at $1,000 or 10% of the contract price, whichever is less
• Ask for lien waivers from subcontractors before releasing final payment

If you want to see what a verified example looks like, consider JMB Builders LLC (CSLB #1103479), an Altadena-based licensed general contractor whose work — including custom homes, ADUs, and Eaton Fire rebuilds — is documented at jmb-builders.com. You can look up that license number yourself at cslb.ca.gov, which is exactly the point: any legitimate contractor should welcome independent verification. (Note: JMB Builders is a featured builder on this site through a paid placement, disclosed for transparency.)

Here at Altadena ADU Builder, we recommend the same verification steps for every ADU project, whether you're building a garage conversion, a JADU, or a standalone backyard unit. The stakes are the same as any major remodel — and in a declared disaster area like Altadena, contracting without a license is a felony under California law, so there's no excuse for cutting corners on credentials.

If you're considering an ADU on your Altadena property, the next step is understanding what's feasible on your lot. Our free ADU feasibility consultation includes a cost-quiz concept render, so you can see a preliminary vision for your property alongside realistic cost and permitting guidance — no pressure, no high-pressure tactics, just the same verified, transparent approach we recommend throughout this guide.