Which Maryland contractor credential do you need?
For covered improvements to existing Maryland residences, start with MHIC. The Maryland Home Improvement Commission licenses and regulates contractors and salespersons who handle covered improvements to existing residences. MHIC defines home improvement to include alteration, remodeling, repair, or replacement of a residential building or part of one, including individual condominium units. The MHIC program page excludes commonly owned condominium areas and buildings containing four or more single-family units.
An MHIC license does not cover new-home construction. Maryland Labor says builders constructing homes in Maryland must register with the Attorney General’s Home Builder Registration Unit. Maryland Labor lists Home Improvement, Electricians, Plumbing, and HVACR as separate licensing programs on its Occupational and Professional Licensing page. Classify the job before buying exam materials or filing.
The MHIC path for existing-home improvements
An MHIC contractor may perform or agree to perform a home improvement for a homeowner. All applicants must pass the licensing exam before applying. A contractor must document at least two years of experience in home improvement work, construction, or related education. The MHIC license requirements also call for financial information covering assets, liabilities, credit, and net worth.
A corporation submits formation and good-standing documents. A contractor using a trade name registers it and submits the registration with the application. The original license period is two years from issuance. Use our starting a construction business guide to organize the entity, insurance, tax, and banking work beside the license filing.
What the MHIC Guaranty Fund covers
The MHIC Guaranty Fund compensates homeowners for actual monetary loss caused by poor workmanship or failure to perform, but only for work by a licensed contractor. The maximum recovery is the amount paid to the contractor, capped at $30,000. If all claims against one contractor exceed $250,000, awards are prorated. See the MHIC program page.
MHIC currently lists a $100 two-year assessment for an original contractor license and a $175 two-year assessment at contractor renewal. The assessment is a license cost, not a substitute for liability coverage or solvency review.
New homes and regulated trades use different tracks
Route the job by what is being built and which trade performs it:
- Existing residence improvement: use the MHIC path for covered alteration, remodeling, repair, or replacement work.
- New-home construction: An MHIC license does not cover new-home construction. Maryland Labor says builders constructing homes in Maryland must register with the Attorney General’s Home Builder Registration Unit. The distinction appears in the MHIC scope FAQ. A company that remodels and builds new homes may need both credentials.
- Electrical work: Maryland currently requires electrical work to be performed by a licensed master, journeyperson, or apprentice electrician. The State Board of Electricians says an apprentice must remain supervised.
- Plumbing or gas work: The Maryland Board of Plumbing licenses and regulates individuals who provide or assist in providing plumbing and gas services in Maryland. Check the job jurisdiction before choosing the issuing authority.
- HVACR work: The Maryland HVACR Board licenses and regulates individuals who provide commercial and residential HVACR services.
The Maryland electrician license guide and Maryland plumbing license guide explain those separate trade paths.
Current MHIC exam details
The MHIC contractor examination has 55 questions; the salesperson examination has 35. Both require at least 70% correct. PSI administers the computer-based exams, which run for two hours and currently cost $63 per attempt. The MHIC exam page says the content is based on the fifth edition of the Contractors Guide to Business, Law and Project Management.
A passing applicant has two years to apply before the score expires. After a failed attempt, the candidate waits 30 days to reapply; later retake requests require 60 days, and the fee is due each time.
Salespersons and subcontractors follow different rules
An MHIC salesperson may represent no more than two licensed contractors when selling home improvements. Salesperson applicants pass the applicable exam before applying, according to the MHIC license categories page. Check the fee schedule at filing because MHIC says application and licensing fees increased effective August 1, 2024.
Maryland eliminated the separate home-improvement subcontractor license category on July 1, 2016. A subcontractor may work without its own MHIC license for an MHIC-licensed contractor, but only a licensed contractor may enter the homeowner contract. The current MHIC notice states that boundary.
The $500,000 insurance floor and solvency options
Effective June 1, 2024, every Maryland home-improvement contractor must maintain at least $500,000 in general liability insurance. The current requirement appears on the MHIC program page. MHIC also reviews financial solvency, and an applicant who does not satisfy the guidelines may use an indemnitor or a surety bond.
The original-license application page publishes two bond forms: $30,000 and $100,000. A bond does not replace liability insurance. MHIC’s older requirements page still displays $50,000, but the newer June 2024 statutory notice sets the current $500,000 minimum.
MHIC does not replace a trade license
Treat MHIC, trade credentials, insurance, and permits as separate pre-scheduling checks:
- Match the contract to the program. Decide whether the customer contract is an existing-home improvement, new-home construction, or a regulated trade scope.
- Verify the individual trade credential. Confirm the worker or qualifier holds the correct active level and that any required company relationship is current. MHIC does not substitute for that trade credential.
- Check board-specific insurance. Maryland’s electrical board currently requires at least $300,000 in general-liability insurance and $100,000 in property-damage insurance for an electrician license, and umbrella coverage is not accepted for those minimums. The State Board of Electricians also requires the policy to identify the licensee and registration number. Do not apply those figures automatically to MHIC, plumbing, or HVACR.
- Resolve the plumbing jurisdiction. State plumbing and natural-gas-fitter licenses apply throughout Maryland except Baltimore County and areas served by WSSC in Prince George’s and Montgomery counties; those jurisdictions issue their own licenses and use their own plumbing code. The Maryland Board of Plumbing explains the boundary.
- Confirm the permit authority and scope. Check the local permit office and the applicable trade board before mobilization, especially when one contract combines remodeling with electrical, plumbing, gas, or HVACR work.
Save the credential lookup, insurance proof, jurisdiction decision, and permit record in the job file. That turns “we hired a licensed sub” into a checkable compliance record.
Maryland contractor-license FAQ
Does an MHIC license cover new-home construction?
No. New-home builders register with the Attorney General’s Home Builder Registration Unit. See the MHIC scope FAQ.
How much liability insurance does an MHIC contractor need?
At least $500,000 under the requirement effective June 1, 2024. See the current MHIC notice.
How long does an original MHIC license last?
Two years from issuance.
Do subcontractors need a separate MHIC license?
Not when working for an MHIC-licensed contractor. Only the licensed contractor may enter the homeowner contract.
What is the MHIC contractor exam?
A 55-question, two-hour computer exam with a 70% passing score and a current $63 fee per attempt.
Watch for the outdated $50,000 insurance text
Maryland Labor’s MHIC pages currently conflict: the older license-requirements page still says $50,000, while the program homepage announces the statutory $500,000 minimum effective June 1, 2024. Use $500,000 as the current floor and confirm the filing documents with MHIC. Current notice and older requirements page.