One of the most important criteria for choosing a contractor is to verify that they have the appropriate state licenses and insurance. There are three reasons that demonstrate just how important licensing and insurance are. First, consumers have lost hundreds of millions of dollars in personal assets, when uninsured companies make egregious errors (including loss of primary residence). Second, every year consumers are faced with lawsuits against their homeowners policies when contractors fail to carry the appropriate workers compensation insurance (Yes, you are liable) Finally, state licensing programs help establish a basic level of competency within the heating and air conditioning. If a contractor cannot produce a license they are not qualified to work on your home.