A contractor license and a certificate of insurance (COI) answer two different questions, and treating one as proof of the other is one of the more common — and costly — mistakes in subcontractor management.
What a license proves
A license is permission from a state or local licensing board to legally perform certain kinds of work. Getting one usually requires passing an exam, showing a minimum amount of experience, and sometimes posting a bond. A license says: this person or business is legally allowed to do this work, as of the last time the board checked.
It says nothing about whether they currently carry insurance. Most licensing boards don't track insurance at all, and the ones that do typically only checked it once, at initial licensure.
What a COI proves
A certificate of insurance is a summary document, usually an ACORD 25 form, that an insurance agent issues showing what policies were in force as of the date printed on the certificate. It says: as of this date, these policies existed with these limits.
It doesn't prove the policy is still active today, that it will still be active next month, or that it actually covers the specific work being performed. A COI is a snapshot, not a live feed.
Why both checks matter, separately
A contractor can hold a perfectly valid, active license and carry zero current insurance. A contractor can also carry excellent insurance and be working without the license required for that trade or jurisdiction. Confirming one tells you nothing reliable about the other — which is why both need tracking, on their own schedules, instead of being assumed from each other.