Credential Confidential -Understanding Government's Requirements for Contractors

"If you think professionals are expensive, try hiring an amateur”- Red Adair

Sometimes a few words say a lot, and the quote above hits it on the head when it comes to construction. Construction is notorious for cost overruns and delays. From incomplete blueprints to unqualified contractors, the reasons for these shortcomings are many.  To improve your odds of success, your toolbox needs to include a tip-top team of qualified contractors who do their work correctly, on time, and on budget. Understanding credentialing will help you accomplish this goal.
Credentialing is the process of verifying the qualifications of licensed practitioners and assessing their professional background.  Credentials are important because they are testament to a person's worth. When it comes to vetting licensed professionals, your assessment must be sound because often practitioners can cause harm through the malpractice and misconduct of their trade.  To be a savvy researcher, you need to know what credentials to look for, where to find them, and how to evaluate them. Because there is confusion between licensure and certification, you are well served to know the difference.

Licensure is a mandatory process by which a government agency grants permission to an individual to engage in a given occupation after verifying that he or she has met predetermined and standardized criteria. In contrast, certification is a voluntary process by which a non-governmental entity grants recognition to an individual after he or she has met established criteria. Although credentialing is primarily used in the medical industry to allow for the third-party payments from insurance companies, construction contractors are also scrutinized for compliance. For example, a lender will verify a contractor's credentials before authorizing funding for new construction. Home improvement financing may also require confirmation of a contractor's ability to perform. Consequently, contractors' licenses and certifications are routinely assessed as a means to establish professionalism.

Credential Conundrum
"Licensed, bonded, and insured" is a term used loosely in the construction industry. In regard to licensing, there are many kinds of licenses and often a single professional will have several licenses-each with a specific purpose. Sometimes a business license (e.g., the "business tax receipt" or the "certificate of use" is mistaken for a professional license. The difference between them is this. A business operating license pertains to the business while a professional license pertains to the individual. It is important to note that whereas the business license authorizes a company to engage in business, it does not authorize an individual to perform a trade.
Many types of contractors are required to have a professional license because improper construction can cause catastrophic damage such as fire, flood, and collapse-and this damage may not be isolated to just one home; it may be widespread. Fire can devastate an entire community. Consequently, Florida has strict standards related to contractor licensing. In Florida, applicants that wish to be licensed as contractors must be able to demonstrate that they are proficient and practiced in their trade and able to perform other duties that are required of them as professionals. Good character must also be demonstrated. Florida's licensing board requires an applicant to provide proof of:
Sufficient trade knowledge, sufficient trade experience, financial stability, and a history free of dishonest and felonious acts.
When it comes to contractor testing, the state of Florida ranks high. Florida requires an applicant pursuing a general contractor's license to pass a challenging test that is  administered over two days addressing building codes, estimating, accounting, contracting, permitting, scheduling, energy efficiency, safety, and law. Because knowledge alone does not ensure competency, extensive experience is also required. In addition, a credit report and financial statement is evaluated to establish the applicant's financial history, and a background check is performed as well.

I spy, then verify
Verifying a contractor's credentials is important because, although many contractors are upstanding and honest individuals, some lie about their qualifications. This deceit can range from verbal exaggerations to cleverly forged documents. Therefore, simply accepting a contractor's word and paperwork is not enough. If you want to make an informed choice, you are obligated to use due diligence. Every state has governing entities that regulate contractors. For example, in Florida the Department of Business and Professional Regulation regulates contractors through licensing. There are also several construction-related professions with practitioners who require licensure. As a means to protect Floridians and the environment, Florida's Department of Agriculture and Consumer Services licenses pest control businesses and certifies professional pest control operators.  With Florida's strong "Sunshine Laws" that allow for the transparency of records, you can verify professional licenses with the government regulatory agencies that issue them. Workers' Compensation insurance coverage can also be viewed.

Construction is expensive when it is done right. When things go wrong, it can be financially devastating. To improve your odds for success, work with credentialed contractors because as a rule, only knowledgeable and practiced professionals are awarded a professional license and other noteworthy certifications. If you need help vetting your potential contractor, use our new online service at

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