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Maryland general contractor license and insurance requirements

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By Next Insurance Staff
Sep 23, 2020 min read

The requirements for a general contractor license in Maryland are split between state and local governments. Licenses for new residential or commercial construction projects are issued by the Clerks of the Circuit Court, found in each of the state’s 23 counties. 

General contractor licenses for home improvements and other areas of specialization are issued by the state government.

Continue reading to learn more about:

  • Different types of Maryland general contractor licenses 
  • How to obtain a general contractor license in Maryland 
  • Other factors to consider when starting a contractor business in Maryland

Planning to work outside Maryland? Check out general contractor licenses in other states.

How to become a general contractor in Maryland

The process of becoming a general contractor in Maryland depends on the kind of work you want to do. Here are the basics you need to know. 

Construction license

You’ll apply for a construction license with the Clerk of the Circuit Court in your county if plan to work on new construction projects, excavating or curbing and paving streets or sidewalks.

Home improvement contractor’s license

If you plan to do work on existing residential property, you will need to get your Maryland Home Improvement Contractor’s License (MHIC) from the Maryland Department of Labor, Licensing and Regulation

Waterfront structures license

The Marine Contractors Licensing Board handles licensing for general contractors that work projects involving waterfront structures, such as boathouses, piers, ramps and wetland observation decks.

Specialization licenses

If you plan to work in an area of specialization, such as HVAC or electrical work, Maryland also requires professional licenses at the state level.

What are the requirements to have a general contractor license in Maryland?

The requirements for a general contractor license in Maryland depend on the license you get. 

For the construction license, requirements vary by county, so you will need to contact the clerk at your county’s Circuit Court Office to find the requirements that apply to you.

To obtain a Maryland Home Improvement Contractor’s License license in Maryland, you’ll need the following:

  • Two years of experience
  • Pass a licensing examination
  • Meet financial guidelines (have more assets than debt) or purchase a surety bond of at least $20,000
  • Pass a credit check
  • Have a Certificate of Good Standing (if you represent a corporation)
  • Purchase $50,000 of contractors liability insurance
  • Obtain approval of your business name (if different from your real name)

If you also want to specialize in a specific trade in addition to being a general contractor, each area will have its own requirements. 

For example, a plumbing license has multiple license types you can earn, from apprentice to journey plumber. A journey plumber needs at least four years as an apprentice, 7,500 hours of training under a master plumber, 32 hours of training in backflow prevention device testing and a passing score on a written exam. 

How much does a general contractor license in Maryland cost?

Construction licenses will vary by county, so you’ll need to contact your local circuit court and clerk’s office.

For MHIC licenses, you must pay a fee of $370 the first time you apply. Additionally, the licensing exam costs $63. License renewals cost $250 and are required every two years.

In addition to application fees, general contractors in Maryland are required to contribute $150 to a guaranty fund. This fund helps Maryland homeowners recoup losses if a licensed contractor fails to complete a project. You’ll need to pay this fee each time you renew your license.

Getting a general contractor license in Maryland

If you want to get a construction license, find your local circuit court and contact them to start the application process. 

If you want a license for home improvements, you can start the application on the Maryland Department of Labor, Licensing and Regulation application page. Download and fill out the necessary paperwork, take any applicable exams and pay the required fees.

After you submit your application, it will usually be reviewed and processed. It typically takes two or three weeks from the time you submit to the time your license arrives. However, your license may be added to the online database (where you can direct potential clients) before your paper license arrives in the mail.

What insurance do Maryland general contractors need?

Aside from licensing, here’s a look at the general contractor insurance you should consider for your business. 

General Liability insurance for Maryland contractors

In Maryland, you must purchase at least $50,000 in coverage to obtain a general contractor license for home improvements, but many business owners buy more, especially if they work with subcontractors on large projects.

General liability insurance can help pay for expenses if you are held liable for an injury (not including your employees) or damage to someone’s property while on the job. Without coverage, you could be forced to pay out-of-pocket.

Workers’ Compensation coverage

General contractors with employees are required to have Maryland workers’ compensation insurance. This insurance can help to cover lost wages and medical expenses if one of your workers or a subcontractor is injured on the job.

Many sole proprietors also get workers’ comp because of the important protection it offers after a workplace accident. Personal healthcare insurance won’t cover lost wages and it might not cover injuries if you are injured while working on a construction site.

Commercial auto insurance for Maryland contractors

Commercial auto insurance provides important protection for business-owned vehicles that are involved in an accident. It can help pay costs associated with injuries and property damage that are not typically covered by personal auto insurance policies. 

How Next Insurance helps Maryland general contractors

Next Insurance has a seamless online process that allows you to quickly get a quote for customized contractors insurance. You can purchase coverage and get a certificate of insurance in less than 10 minutes. Our U.S.-based advisors are available to help if you have any questions. 

Get your quote today.

Do you have projects in a different U.S. state? Visit our summary of general contractor license requirements in every state.

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By Next Insurance Staff
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