The Contractors State License Board (CSLB) protects consumers by licensing and regulating California's construction industry. There are about 300,000 licensed contractors in the state, in 43 different licensing classifications. In addition to educating consumers about contractors and construction law, CSLB activities include administering examinations to test prospective licensees, issuing licenses, investigating complaints against licensed and unlicensed contractors, issuing citations, suspending or revoking licenses, and seeking administrative, criminal, and civil sanctions against violators. In fiscal year 2010-11, CSLB helped recover nearly $45 million in ordered restitution for consumers.
The CSLB's Statewide Investigative Fraud Team (SWIFT) works to eliminate unlicensed contractors working in California. Undercover sting and sweep operations are conducted weekly around the state. SWIFT encourages you to report unlicensed activity.
The http://www.cslb.ca.gov/ web site you can find educational materials about hiring contractors and the construction process. You can also check the status of a contractor's license, find other important Contractors License Law information and file a complaint.
In California, if a plumbing contractor has employed plumbers, they're required to carry workers' compensation and liability insurance. The importance of this cannot be overstated. If a plumbing employee is injured working on your plumbing and the plumbning contractor doesn't have plumbers insurance, you could be liable to pay for injuries and rehabilitation. Your homeowner's insurance may or may not cover those costs. You should check with your insurance carrier to make sure the workers' compensation insurance coverage being provided by the plumbing contractor is adequate. Learn more from the California Department of Insurance.
Commercial general liability insurance is not required, however, it covers damage to your property. If the plumbing contractor does not carry general liability insurance, they should be able to explain how they would cover losses that would ordinarily be covered by insurance. If your plumbing contractor damages your property and doesn't carry commercial general liability insurance, you or your insurance policy could end up paying for damages.
A licensed plumbing contractor must provide you with information regarding both types of insurance in your written contract.