Gather information regarding your prospective contractor such as the name of the owner and his business, in what city, county and state they are licensed and, if possible, their business and contractor's license numbers.
Research your contractor on a website such as contractors-license.org or visit a state- or city-specific website by searching for "Oregon contractor's license" or "Los Angeles contractor's license." Contractors-license.org will allow you to choose a state and follow the links within the state for additional information. This site also lists the contact information for the state-specific departments of commerce. Most query results for contractor licensing are state- or city-specific.
Call your state or local department of commerce and request a copy of the contractor's license and information regarding any complaints against their business.
Ask the contractor for a copy of their license and proof of general liability insurance. According to contractor-license.org, all construction contractors that do not work on an hourly basis are required to hold general liability and workers compensation insurance.
Request a copy of the contractor's certificate of insurance to determine if the policy is in force, whether their policy limits are adequate for your project, and when the current coverage period expires. Your contractor should provide you with their insurance carrier's name, contact information and policy number to make this an easier task.