General contractor insurance in Maryland
Learn about business insurance requirements and the most common policies for general contractors in Maryland.
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What are the most common policies for general contractors in Maryland?
General contractors may need different types of insurance coverage depending on the work they do and their client contracts. These policies are the most popular for general contractors in Maryland, and provide the best coverage for their insurance needs.
General liability insurance
This policy covers basic risks, such as a client who trips over your toolbox and suffers an injury. Bundle it with commercial property insurance for savings in a business owner's policy.
- Customer bodily injuries
- Damaged customer property
- Product liability insurance
Business owner's policy
A BOP bundles general liability coverage and commercial property coverage at a discount. It's often the most cost-effective type of insurance for general contractors.
- Accidents that injure clients
- Client property damage
- Damage to your building or its contents
Workers’ compensation insurance
Most states require workers’ comp for general contracting businesses that have employees. It also protects sole proprietors from work injury costs that health insurance might deny.
- Employee medical expenses
- Disability benefits
- Employee injury lawsuits
Commercial auto insurance
A business auto policy covers the cost of injuries and property damage in accidents involving a general contractor’s van. It can also pay for repairs to vehicles damaged by weather or vandalism.
- Legal costs from an auto accident
- Property damage caused by your vehicle
- Vehicle theft and vandalism
Inland marine insurance
This policy helps pay for repair or replacement of a contractor’s saws, nail guns, and other tools if they're lost, stolen, or damaged. It's also called tools and equipment insurance.
- Hand tools and power tools
- Scissor lifts and other equipment
- Other items brought to worksites
Professional liability insurance
This policy is also called errors and omissions insurance (E&O). It covers legal fees when a general contractor is sued over a mistake, such as using the wrong materials.
- Accusations of negligence
- Failure to complete a project
- Work mistakes and oversights
Contractor surety bonds
A bond guarantees reimbursement for the client if a general contractor fails to fulfill the terms of a contract or adhere to building codes. Common bonds include bid bonds, performance bonds, and payment bonds.
- Compliance with laws
- Incomplete jobs
- Breach of contract
Builder's risk insurance
This policy covers structures in progress and materials, often paying for damage caused by fire, vandalization, and non-severe weather events.
- New construction
- Building renovation
- Worksite theft and vandalism
Contractors pollution liability insurance
Contractors pollution liability covers costs related to pollution, such as a lawsuit alleging harm caused from exposure to silica dust on a construction job site. It's sometimes referred to as environmental insurance.
- Pollution events
- Spills during transport
- Lawsuits over contaminants
What insurance is required for general contractors in Maryland?
General contractors in Maryland may need to carry the following insurance policies to comply with county or state laws:
General liability insurance
General liability insurance is the foundation of a general contractor’s protection. It covers accidents that damage a client's property or cause a bodily injury, along with libel and other advertising injuries.
A general liability policy is required if you work on home improvement projects. The type of work you do may also determine how much coverage you're required to carry.
Contractors in Maryland may also need this policy to sign a commercial lease or meet the terms of a client's contract. Adding commercial umbrella insurance can boost the coverage limits on general liability insurance and other policies.
Workers' compensation insurance
If you own a construction or home improvement business in Maryland with one or more employees, your business is required to carry workers' compensation insurance.
Workers' comp insurance covers medical costs and disability benefits when an employee is injured on the job or develops an occupational illness. It's a key policy for the construction industry and related professions, such as carpenters, electricians, and plumbers.
Sole proprietors may not need workers' compensation coverage for their general contractor license, but it's still a good idea to carry this insurance. Personal health insurance doesn't cover work-related personal injuries, so it can save you from out-of-pocket medical expenses.
Commercial auto insurance
Business vehicles in Maryland must be covered by a commercial auto policy.
Commercial auto insurance protects vehicles owned by your general contracting company. It covers property damage and medical bills in an accident, along with vehicle theft, weather damage, and vandalism.
How much does insurance cost for general contractors in Maryland?
General contractors in Maryland who buy policies from Insureon pay an average premium of:
General liability: $100 per month
Workers' compensation: $271 per month
Commercial auto: $233 per month
Insurance agencies look at several factors when calculating the cost of general contractor insurance, including:
- Type of building construction, such as townhouses, multifamily homes, or offices
- Business property and equipment
- Business income and size
- Years of work experience
- Policy limits and deductibles
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When do you need a general contractor business license in Maryland?
In Maryland, from Baltimore to Ocean City, certain classes of general contractors are required to carry a state-issued license depending on the type of construction projects they want to work on.
There are four classifications of contractors in the state of Maryland:
- New home construction: This class doesn't require a license, but must be registered with the Home Builder Registration Unit.
- Existing residential properties: You must have a Maryland Home Improvement Commission (MHIC) license.
- Home improvement projects: This type of work requires a license from the MHIC.
- Commercial contractors: There's no state-level licenses, but you must register at the city or county level.
MHIC license requirements include:
- Work and education requirements
- Passing a business and law exam
- Proof of financial stability or a surety bond
- Proof of an active $50,000 general liability insurance policy
- A license application fee of $135
To learn more about Maryland licensing and registration requirements, visit the Maryland.gov website.
How do I get Maryland contractors insurance?
Insureon’s industry-leading technology helps general contractors in Maryland save time and money shopping for business liability insurance and property insurance. Start an online application to get free quotes from top-rated U.S. insurance companies.
To get through the application quicker, have this information ready:
- Workforce details, such as the number and types of employees (part-time, full-time, or subcontractors)
- Current and projected revenue
- Business partnerships
- Insurance history and prior claims
- Commercial lease insurance requirements
Our licensed insurance agents can answer your questions and help you find the right, most affordable coverage for your Maryland business. Small business owners can access their certificate of insurance (COI) shortly after they apply for quotes and pay for a policy.