Should we hire the licensed, insured company or the cheaper independent guy?
Hire the licensed, insured company.
The independent guy saves money now, but one bad job or injury can cost you far more. What settles it: the size and risk of the job.
Checked Sep 8
What's the job?
Why?
Insurance is the big one If the independent guy gets hurt on your property, you could be on the hook without his coverage.
License means accountability A licensed company has a board to answer to, so shoddy work has recourse.
Cheaper isn't always cheaper Fixing a bad job later usually costs more than the upfront savings.
If the independent guy is a known, trusted pro with his own insurance, that changes the math.
If your situation is different
What's the job: Small repair. Independent guy is fine. For a small, low-risk job, the savings are worth it if he's got references.
What's the job: Big project. Stick with the licensed company. For anything structural or expensive, the license and insurance are your protection.
What's the job: Could hurt someone. Licensed company, no question. If it's electrical, roofing, or anything that could injure, don't risk it.
Who is hiring the licensed, insured company right for?
Right for
- Anyone with a job over $5,000
- Work that could injure someone
- Jobs requiring permits or inspections
- Homeowners who can't afford a lawsuit
Wrong for
- Small repairs under $500
- Cosmetic fixes with no risk
- People who can vet the independent thoroughly
- Renters with landlord approval
What does hiring the licensed, insured company cost in 2026?
| Figure | Value | Why it matters |
|---|---|---|
| Typical licensed contractor markup | 10 to 20% over independent, 2026 | That's the price of insurance, licensing, and accountability. |
| Average cost to fix a bad job | $3,000 to $10,000, 2026 | Often more than the savings from hiring the cheaper guy. |
| Medical bill for a serious injury | $50,000+, 2026 | If the independent gets hurt, you could pay this without his insurance. |
| Permit fine for unlicensed work | $500 to $5,000, 2026 | Cities can fine you and make you tear out the work. |
What's the biggest mistake when choosing between licensed and independent?
The biggest mistake is assuming the independent guy has no insurance just because he's cheap. Some do carry coverage. But you must ask for proof and verify it's current. If he can't show you a certificate of insurance, that's a red flag. Don't rely on his word; call the insurer to confirm.
How do you decide in two minutes?
- Write down the job's total cost and risk of injury.
- Ask the independent for a certificate of insurance and license number.
- Verify the insurance is active with the insurer and the license with the state board.
- If the job is over $5,000 or could hurt someone, pick the licensed company regardless of price.
People also ask
What should a contract include?
Hire the licensed, insured company. The cheaper guy saves money now but costs you if something goes wrong. That's the whole trade.
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