If you were considering hiring an independent contractor to work on your home, would you prefer the contractor to be licensed in some way, or would it matter? Would a contractor who is a member in good standing of a local professional organization appeal to you more than a contractor with no such membership? What is the difference?

Most people would instinctively assume that there would be some benefit, or at least, less risk in hiring a contractor that is licensed or industry certified - but why?

Companies that go to the extra work and expense required to achieve certification or licensing are usually those companies most interested in maintaining the good name and reputation of their companies, and are more likely to do quality work as a result.

There are some definite advantages in giving preference to contractors that are licensed or hold membership in one or more professional organizations, even if such licensing or memberships are not required by the laws in your area of the country.

Licensing, as well as industry memberships and certifications can be found through voluntary organizations, and are still a good way to differentiate between contractors. In the same way that good referrals reflect well on a company, good standing in industry organizations is also a sign of a quality business.

Be sure to assess the validity of any such memberships and certifications you are presented with - do this by finding out how a company gets these certifications. How does one qualify to be licensed? By understanding the qualifications, you will be able to discern how much weight they carry.

Perhaps you would assume that companies that hold such qualifications would be more expensive to hire. This is not always the case - remember that often the cheapest price is not really a ‘deal’ at all.

“If it sounds too good to be true, it probably is,” says the adage, and for good reason. The quality of the work you are receiving for your money must be as important a consideration as the price itself. You must ask yourself questions like, “How is it possible for Contractor ‘X’ to do the same job for so much less (or more) than Contractor ‘Y’?”

While certainly, there are non-licensed companies that are capable of good-quality work, generally speaking, licensed companies bring with them an extra measure of reassurance for the client.

When you hire a licensed contractor, you stand to gain significant peace of mind in many ways. Many license agreements and/or industry memberships provide significant benefits not found outside these memberships. Benefits such as an independent, third-party dispute resolution system, where disagreements can be mediated by a third party, or specific requirements that disallow memberships to contractors who register complaints with the public.