Need GC to be licensed for rehab job?

[Leland S.]

I found a GC contractor reference for a flip I have in works who is reasonably priced. The referral was glowing and the people apparently have used him for 20 years on a bunch of rental properties they own. I asked him for his license and insurance and suddenly he shy's away and I don't hear from him. I assumed I needed them to be licensed for my protection (for disputes I can go through the state), but is that the only reason to hire licensed guys? I really don't see the need, especially if they can just close down shop and open a new Co next year with a new license, or does the state prevent that? I've had a crappy GC before who was licensed and all that, I never ended up filing a complaint because I just didn't want to deal with it in the end. I also understand being bonded is a good idea, but probably much less small guys have that. 

So really, as far as I can tell what's most important is that they have good references, you can see their past work, and they have an insurance policy covering them and anyone they hire. I have an insurance policy for my flip also, maybe I would add coverage for them and hire them through my LLC?

I'm obviously trying to stay low cost here as it's a flip and use a more lean contractor. For some of the more critical stuff like floor leveling I will use a specialist company. GC would hire electricians etc and I presume they would be licensed also, I can demand it in our contract also I suppose. 

As far as permits go, I know you don't have to be licensed to pull them (when the last GC I had messed up everything, I removed him from the permits and took them over in my name), but definitely makes sense for the contractor to be on the permit since they will be dealing with the inspector, correct? One downside I experienced there was that the contractors guys kept failing inspection and even closed up the walls not knowing the electric failed. They never told me this and I probably burnt a half week or more of labor hours billed because I didn't know they were f'ing up.