Maryland home improvement contractors need general liability coverage of at least $500,000, and employers must buy workers’ compensation insurance or be approved to self-insure. The Maryland Home Improvement Commission (MHIC) wants a Certificate of Insurance naming it as certificate holder at 100 S. Charles St., Tower 1, Baltimore, MD 21201. Contractors must give the Commission at least 10 days’ notice before liability insurance cancellation takes effect.
TL;DR:
- Treat the $500,000 limit as a floor: review each contract’s insurance clause and confirm whether the job requires higher limits or specific policy wording.
- Employers can obtain coverage from an authorized insurer, including Chesapeake Employers’ Insurance Company as insurer of last resort, or seek approval to self-insure.
- Applicants who miss MHIC’s personal asset guidelines must find an indemnitor or obtain a surety bond, and each business needs a qualified MHIC license holder.
- When MHIC requests a complaint response, keep the liability certificate, permits, and inspection records ready; the Commission sets a response deadline.
- Consider commercial auto, tools and equipment, builder’s risk, or professional liability when your vehicles, gear, projects, or design work create exposures clients require you to cover.
Table of Contents
- What is the Maryland general liability minimum for MHIC licensure?
- How do workers’ compensation obligations work for contractors?
- Which other policies do contractors commonly carry?
- What does MHIC need on your Certificate of Insurance?
- When does MHIC require a bond, and what happens without insurance?
- What should your compliance checklist look like?
- A contractor’s view on staying audit-ready
- How we handle permits and insurance checks on your project
- FAQ
- Sources
What is the Maryland general liability minimum for MHIC licensure?
House Bill 738 amended §8-302.1 so that an applicant for a home improvement contractor license, or a licensed home improvement contractor, must maintain at least $500,000 in general liability insurance. That is the statutory minimum. Confirm your current policy limit before filing.
The rule applies to MHIC home improvement contractors. The coverage requirement applies to contractors seeking or holding an MHIC license.
Treat $500,000 as a statutory minimum, not a ceiling. A policy that satisfies MHIC could still fall short of what a specific job requires, so check the insurance clause of each contract. Read the insurance clause of every contract before you sign, and compare it with the limits printed on your certificate.
How do workers’ compensation obligations work for contractors?
Maryland employers must either buy workers’ compensation insurance or be approved to self-insure. State reporting confirms that employers may purchase coverage from an authorized insurer, including Chesapeake Employers’ Insurance Company, which serves as the insurer of last resort, or apply for approval to self-insure. The Workers’ Compensation Commission and the Maryland Insurance Administration oversee this system.
If you are approved to self-insure, keep that approval documentation accessible.
Workers’ compensation premiums can vary. Ask your broker how your operations are classified.
Which other policies do contractors commonly carry?
Beyond the two core coverages, several policies show up on client checklists and permit conditions.
Commercial auto is a type of coverage contractors may consider for vehicles used for business.
Tools and equipment coverage is another option contractors may consider for business gear.
Builder’s risk is another type of coverage contractors may consider for a project.
Professional liability is another type of coverage contractors may consider when providing design or engineering input.
What does MHIC need on your Certificate of Insurance?
The certificate holder wording is not flexible. MHIC’s checklist requires the certificate to list the holder as: MHIC, 100 S. Charles St., Tower 1, Baltimore, MD 21201. Give your broker that exact text.
Check the certificate details with your broker before you submit.
Timing matters too. Contractors must give the Commission at least 10 days’ notice before the effective date of any liability insurance cancellation to remain in compliance. Ask your broker how to provide the required notice to the Commission.
Certificates also come up after a complaint. When MHIC sends you a copy of a complaint, it asks for a written response that includes a certificate of liability insurance, all permits and inspection records within a set timeframe. Keep those documents together so they are easier to provide when requested.
When does MHIC require a bond, and what happens without insurance?
MHIC reviews financial solvency based on an applicant’s personal assets. If those personal financial guidelines are not met, the applicant must obtain an indemnitor or purchase a surety bond. Each licensed business also needs at least one individual who holds an MHIC license and meets the financial and insurance prerequisites.
During a complaint, MHIC requests a written response that includes the insurance certificate, permits and inspection records. Check with MHIC about the applicable response timeframe and any consequences of missing or lapsed coverage.
What should your compliance checklist look like?
Run through this list before every application, renewal or new project:
- Confirm your general liability limit and policy wording.
- Make sure the certificate lists the MHIC holder address exactly as required.
- Verify workers’ compensation coverage or your approved self-insurance.
- Confirm how to give the Commission at least 10 days’ notice before liability insurance cancellation takes effect.
- Keep permit and inspection copies next to your insurance papers, as we explain in our guide to basement permit requirements in Maryland.
Then sit down with your broker and ask about additional insured endorsements, waiver of subrogation, project-specific endorsements, and whether the policy language describes the operations you actually perform. Site rules count as compliance too: construction site signage requirements are worth a look when you set up a job.
Pro Tip: Keep a digital folder with current certificates, policies and permits so you can produce them when needed during a complaint or renewal.
A contractor’s view on staying audit-ready
Insurance paperwork rarely feels urgent until a permit stalls or a client asks for proof the same afternoon. As a contractor, we have found that staying organized can help projects run smoothly. Assign one person to own compliance documents, and keep everything in a shared folder.
— Arienne
How we handle permits and insurance checks on your project
Our team at Axenia Construction can assist clients with permit submissions and subcontractor insurance checks. When you work with us, we handle:
- Permit applications and the records that go with them
- Insurance verification for the trades we bring onto your site
- Clear communication about what each step requires
Visit our General Contracting page to start a compliance-check conversation. If you want to confirm credentials first, see how to verify a contractor license in Maryland.
FAQ
What insurance do contractors need in Maryland?
Home improvement contractors need general liability insurance to meet the MHIC minimum, and workers’ compensation if they have employees. Many also carry commercial auto, tools and equipment, builder’s risk or professional liability, depending on the work and client contracts.
What is the minimum liability insurance MHIC requires?
The statutory minimum for applicants and licensed home improvement contractors is $500,000 in general liability coverage. Contracts may demand higher limits, so check each agreement.
Do contractors need a license in Maryland?
Home improvement work in Maryland falls under MHIC licensing, and the license carries insurance and financial prerequisites. Confirm whether your trade requires a license with MHIC before you start work.
Who should be the certificate holder on my MHIC certificate?
List the holder exactly as MHIC specifies: MHIC, 100 S. Charles St., Tower 1, Baltimore, MD 21201. Your broker can add that wording when issuing the certificate.
Sources
Confirm every detail on these primary pages before filing or buying coverage: the MHIC license requirements, the HB 738 chapter text, the MHIC complaint FAQ, and the Maryland Insurance Administration’s workers’ compensation report.
- Original Contractor Requirements/Checklist – Maryland Home Improvement Commission (MHIC) – Division of Occupational and Professional Licensing
- 2024 Regular Session – House Bill 738 Chapter
- Sarah T. Albert, Department of Legislative Services (5 copies)
- Labor
