Operating a construction or contracting business in Maryland requires proper licensing and insurance coverage. The specific requirements depend on the type of construction work being performed. This guide provides an overview of the licensing and insurance rules for general contractors and specialty trade contractors in Maryland.


In Maryland, a contractor license is required for individuals and companies performing home improvements, remodeling, renovations, and repairs on existing residential properties. New home construction has separate licensing requirements. Commercial construction projects may require registration and licensing at the local level. Specialty trade work like electrical, plumbing, and HVAC typically need separate licensing.

Proper insurance coverage is also crucial. Liability insurance protects the business in case of property damage or bodily injury. Workers’ compensation provides benefits for employees injured on the job. Other policies may be recommended depending on the type of work.

Meeting all requirements is essential for construction businesses to legally and safely operate in Maryland. This guide covers the key steps and details.

Home Improvement Contractor Licensing

The Maryland Home Improvement Commission (MHIC), part of the Department of Labor, Licensing and Regulation, oversees licensing for residential renovation and repair work. A Maryland Home Improvement Contractor’s License is required for any projects on existing homes or dwellings. This includes:

  • Additions, alterations, improvements
  • Bathroom and kitchen remodels
  • Basement and attic conversions
  • Window, door, siding, and roof replacements
  • Patios, decks, fences, walkways
  • Pools, hot tubs, outdoor structures
  • Painting, flooring, carpentry, masonry
  • Plumbing, electrical, HVAC work

To qualify for an MHIC license:

  • Complete the business and law exam administered by PSI Examinations
  • Prove at least 2 years of experience in home improvement or construction
  • Show financial solvency and stability
  • Obtain $50,000 minimum in liability insurance
  • Pay licensing fees

For new applicants, the exam fee is $63 and the initial 2-year license costs $370. Renewals are required every 2 years for $250 plus a $150 guaranty fund assessment.

The MHIC license application involves submitting proof of work experience, financial documents, liability insurance, and passing exam results. Licenses can be obtained as sole proprietorships, partnerships, corporations, or LLCs.

New Home Construction Licensing

Building new single-family homes, townhouses, and condominiums in Maryland requires registering with the Home Builder Registration Unit of the Office of the Attorney General. All builders and their sales representatives must register before offering new homes for sale.

The registration process involves submitting an application and paying a fee. For builders, the initial registration fee is $300 and renewals are $150 per year. Sales reps pay $100 initially and $50 for annual renewals.

Builders are also required to provide home warranty security by participating in the Maryland Home Builder Guaranty Fund or obtaining private home warranty insurance. These help protect homeowners if the builder fails to honor warranty obligations.

Commercial and Government Construction Licensing

Licensing requirements for commercial construction projects vary based on the location and type of work. Registration and permitting is often required at the local level through county or municipal offices.

Common commercial licenses and registrations include:

  • Construction licenses – For new buildings, excavation, paving, etc. Obtained from the Clerk of the Circuit Court.
  • Electrical licenses – Required for commercial electrical work. Issued by the State Board of Master Electricians.
  • Plumbing and gasfitter licenses – For commercial plumbing and gas work. Issued by the State Board of Plumbing.
  • HVACR licenses – For heating, ventilation, air conditioning, and refrigeration work. Issued by the State Board of Heating, Ventilation, Air Conditioning, and Refrigeration Contractors.
  • Building permits – Obtained from local inspections offices for new structures and renovations.

Government and public works construction projects may have additional licensing and prequalification requirements related to contractor competence and experience.

Specialty Trade Licensing

Many types of specialty trade work require separate occupational licensing in Maryland:

  • Electrical – Electrician licenses are issued by the State Board of Master Electricians to master electricians, master restricted electricians, master elevator electricians, and limited energy electricians.
  • Plumbing – Master and journey plumber licenses are issued by the State Board of Plumbing.
  • HVAC – HVACR licenses are issued by the State Board of Heating, Ventilation, Air Conditioning, and Refrigeration Contractors.
  • Asbestos – A license from the Asbestos Control Program is required for asbestos abatement work.
  • Lead paint – Certification from the Maryland Department of the Environment is required for lead paint abatement.
  • Crane operators – Licenses issued by the Maryland Apprenticeship and Training Council.
  • Stationary engineers – Licenses issued by the Board of Stationary Engineers.
  • Arborists – Tree expert licenses issued by the Maryland Department of Natural Resources.

In many cases, the qualified license holder must be an employee or member of the construction business. Research all relevant specialty licenses before beginning work.

Insurance Requirements

Maryland requires certain types of minimum insurance coverage for construction contractors:

  • Liability insurance – General liability of at least $50,000 is required for home improvement contractors. Higher amounts are recommended for general contractors and commercial work.
  • Workers’ compensation – Required for companies with 1 or more employees. Provides coverage for jobsite injuries and illnesses.
  • Auto insurance – At minimum, businesses must carry the state mandated liability coverage. Additional coverage for business vehicles is recommended.
  • Surety bonds – May be required by some licensing boards and municipalities to provide financial protection to customers.
  • Builder’s risk – Recommended for new construction projects to cover materials and equipment during the building phase.

Maintaining continuous and adequate insurance coverage is essential for construction companies. Partnering with an experienced insurance agent can help identify any additional recommended policies based on operations.


Construction businesses in Maryland need to be aware of and compliant with all relevant licensing and insurance requirements. Key steps include:

  • Obtaining an MHIC license for residential renovation and repair work
  • Registering as a new home builder for single-family construction
  • Securing applicable county/city registrations for commercial projects
  • Acquiring any mandatory specialty trade licenses
  • Carrying proper liability insurance and workers’ compensation
  • Maintaining required surety bonds if necessary

Meeting these standards ensures construction companies and contractors can legally operate while protecting customers, employees, and themselves from undue risk. Partnering with qualified professionals for licensing, insurance, accounting, and legal advice is highly recommended when starting or running a Maryland construction business.