For a Maryland home improvement contractor license, the insurance that the license itself requires is general liability, not workers compensation. The Maryland Home Improvement Commission requires a licensed home improvement contractor to carry general liability insurance of at least 500,000 dollars, raised from a much lower figure in 2024, along with a surety bond or participation in the state guaranty fund and proof of experience. Workers compensation is required separately, under the state's Workers' Compensation Act, once you have even one employee. So a contractor typically needs both, for two different reasons.
Who this is for: Maryland home improvement contractors and tradespeople getting or renewing a license, sorting out which insurance the license needs and which the law needs.
The short version
- The home improvement license requires general liability insurance of at least 500,000 dollars.
- It also requires a surety bond or guaranty fund participation and proof of experience.
- Workers comp is required separately, under the Workers' Compensation Act, once you have one employee.
- A genuine sole proprietor with no employees can document exempt status instead of a comp policy.
- Maryland has no single statewide license for larger commercial building; that is trade and locality specific.
What the home improvement license requires
Residential home improvement work in Maryland is licensed by the Maryland Home Improvement Commission, and the license carries its own insurance and bonding rules that are separate from the workers comp mandate. The general liability requirement was raised sharply in 2024, so contractors renewing may need to increase their limits. The bond or guaranty fund piece protects consumers, and the experience requirement is about qualifications, not insurance. None of these is a substitute for workers comp, which stands on its own.
| Requirement | What it is | Notes |
|---|---|---|
| General liability insurance | At least 500,000 dollars of coverage | Raised from a much lower figure in 2024 |
| Surety bond or guaranty fund | A 50,000 dollar contractor bond, or guaranty fund participation | Protects consumers, not your workers |
| Experience | Proof of at least two years of experience | A qualification, not insurance |
| Workers compensation | Required under the Workers' Compensation Act | Needed once you have one employee, separate from the license |
Where workers comp fits in
Workers comp is not part of the license checklist in the same way, but it is not optional for a contractor with a crew. Maryland requires coverage from your first employee, so any home improvement contractor who hires help needs a policy independent of the license. A genuine sole proprietor with no employees can document exempt status rather than provide a certificate of coverage, but the moment they bring on a worker the requirement applies. And because a principal contractor can be made to pay comp for an uninsured subcontractor's injured worker, licensed contractors are wise to collect proof of coverage from every sub, not just carry their own. Misclassifying workers to avoid premium can also expose a contractor to back premium, state penalties, and license sanctions.
An Ellicott City example
Illustrative, not a quote. An Ellicott City remodeler holds a Maryland home improvement license, carries the required general liability and bond, and works alone. As a sole proprietor with no employees, they document their exempt status rather than buy a comp policy on themselves. When they land bigger jobs and hire two carpenters, Maryland's comp requirement applies from the first hire, so they add a workers comp policy and start collecting certificates from any subcontractor they bring on. We help licensed contractors line up the liability, bond, and workers comp pieces so nothing is missing at renewal or on a job site. See our workers comp for general contractors page.
Real questions Maryland owners ask
What insurance do I need for a Maryland contractor license?
For a home improvement license, general liability insurance of at least 500,000 dollars, plus a surety bond or guaranty fund participation and proof of experience. Workers comp is required separately once you have an employee.
Is workers comp required for a Maryland home improvement license?
Not as part of the license itself, but yes under the Workers' Compensation Act once you have one employee. A contractor with a crew needs a policy independent of the license requirements.
How much general liability do I need for the license?
At least 500,000 dollars for a Maryland home improvement contractor license. That minimum was raised sharply in 2024, so contractors renewing an older license may need to increase their limits.
Do I need a bond too?
Yes. The license requires a contractor surety bond, commonly 50,000 dollars, or participation in the state guaranty fund. That protects consumers and is separate from insurance that protects your workers.
I work alone. Do I need workers comp for the license?
Not if you are a genuine sole proprietor with no employees; you can document exempt status instead. But the moment you hire even one worker, Maryland requires a workers comp policy.
Am I responsible for a subcontractor's injured worker?
You can be. A Maryland principal contractor can be made to pay comp for an uninsured subcontractor's injured worker, so collect proof of coverage from every sub in addition to carrying your own policy.
Is there one statewide contractor license for all construction?
No. Maryland licenses residential home improvement work through the Home Improvement Commission, but there is no single statewide license for larger commercial building, which is trade and locality specific.
Why Maryland owners choose Morrow
- We shop the right market for you. In Maryland you buy workers' comp on the open market from any private insurer licensed in the state, and Maryland also runs a competitive state fund, Chesapeake Employers' Insurance Company, that both competes for ordinary business and must cover eligible employers no one else will take, so we can shop your rate widely and still have a guaranteed fallback for hard-to-place work.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Maryland guides
Every Maryland business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Maryland (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Do I need workers comp for 1099 contractors?
- Glossary: ghost policy
- Maryland contractor workers comp
This guide is general information, not legal advice. Maryland rules and penalty amounts can change, so verify current requirements with the Maryland Workers' Compensation Commission or a licensed advisor before you rely on them. Last updated: July 2026.