When it comes to hiring a commercial contractor, it’s tempting to focus on budget, timeline, and project scope. But there’s one critical factor that often gets overlooked—verifying your contractor’s credentials.

Skipping this step might seem like a shortcut to getting started faster, but in reality, it’s a risk that could cost you thousands or jeopardize the success of your entire project.

Here’s why doing your due diligence matters, what to look for, and how to protect your investment from day one.

The Real Cost of Cutting Corners on Contractor Credentials

Commercial construction projects come with high stakes: strict timelines, regulatory requirements, safety standards, and major financial investments. Working with an unqualified or improperly credentialed contractor doesn’t just put your budget at risk—it can lead to project delays, costly rework, code violations, or even legal action.

According to the Federal Trade Commission (FTC), hiring unlicensed contractors is one of the top causes of construction-related consumer complaints each year. Fines for non-compliance and insurance gaps can quickly snowball into tens of thousands of dollars in unexpected expenses. If your contractor doesn’t carry the proper liability insurance or worker’s compensation coverage, you could be on the hook for accidents or injuries that happen on your property.

What Does Verifying a Contractor’s Credentials Actually Mean?

It’s more than just asking for a business card or checking an online review. Verifying a contractor’s credentials involves confirming that they meet all legal, professional, and safety requirements for the type of work you’re hiring them to do.

Here’s what to check:

• Business License
  Make sure your contractor holds a valid business license in your state. In Michigan, you can check licenses through the Michigan Department of Licensing and Regulatory Affairs (LARA).

• Trade-Specific Licenses
  For certain trades like electrical, plumbing, or HVAC work, your contractor (or their subcontractors) should hold specific licenses beyond a general business license.

• Insurance Coverage
  At a minimum, your contractor should carry general liability insurance and worker’s compensation coverage. Don’t just take their word for it—ask for current certificates and verify with their insurance provider.

• Bonding
  Some projects require a bonded contractor. This provides financial protection in case the contractor doesn’t meet the terms of the agreement.

• Certifications and Training
  Depending on your project type, certifications in areas like OSHA safety training, LEED building standards, or manufacturer-specific installation practices can add another layer of protection and expertise.

• References and Past Work
  While not a formal credential, checking references and reviewing past projects can help you gauge your contractor’s experience with projects similar to yours.

Why Commercial Projects Raise the Stakes Even Higher

For commercial property owners and facility managers, the risks of working with an under-qualified contractor multiply quickly.

Large-scale projects often involve:

• Multiple trade partners

• Complex permitting processes

• Coordination with state or municipal agencies

• Strict safety and compliance standards

• Sensitive operating environments (like healthcare or government buildings)

A contractor who lacks the right credentials may cut corners just to keep up—or worse, fall apart mid-project under the pressure.

At Clement Construction, we’ve seen firsthand how poor planning and unqualified teams can lead to stalled projects, failed inspections, and budget overruns.

Red Flags to Watch for When Hiring a Contractor

If you’re vetting a potential contractor, here are a few warning signs that they may not have proper credentials—or may not be the right fit for your commercial project:

• They won’t provide proof of licensing or insurance.

• They ask for large upfront payments before work begins.

• They’re vague about timelines, permitting, or project scope.

• They have limited experience with commercial construction.

• Their references or portfolio don’t reflect projects similar to yours.

Trust your gut—if something feels off, it’s worth taking a step back to reassess.

How to Verify a Contractor’s Credentials

Doing your homework upfront may feel like extra work, but it’s an investment that pays off in peace of mind—and project success.

Here’s a simple verification checklist for commercial clients:

1. Ask for Documentation: Request copies of licenses, insurance certificates, bonding information, and any relevant certifications.

2. Check with State Agencies: Use official tools like LARA’s license lookup to confirm validity.

3. Confirm Insurance Coverage: Call the insurance provider directly to make sure policies are active.

4. Ask About Compliance History: Have they passed inspections on similar projects? Have they worked with state, municipal, or federal agencies before?

5. Review Past Projects: Look for case studies or project summaries that align with your project type, size, and industry.

Credential Checks Are Risk Protection

In construction, surprises are rarely good news—especially when it comes to the team you’ve hired. Verifying a contractor’s credentials helps protect your timeline, your budget, and the long-term safety and value of your property.

It’s not just a paperwork exercise. It’s about making sure the people responsible for your investment have the qualifications, experience, and integrity to deliver.

At the end of the day, a qualified contractor isn’t just building your project—they’re safeguarding your bottom line.

Ready to Start Your Next Project?

If you’re beginning the search for a commercial construction partner, take time to verify credentials—and don’t hesitate to ask tough questions.

Looking for more tips on preparing for your project? Check out our recent blog on construction planning best practices.

When you’re ready to talk, Clement Construction is here to help with licensed, insured, and experienced across a wide range of commercial projects throughout Michigan.