How to Check a Maryland Contractor's Insurance Before You Sign

Ask for the certificate of insurance, then verify it independently: the named insured must match the company on your contract, the policy dates must cover your job, and workers' compensation must appear. Confirm it with the agency listed on the form. Remodel Now remodels kitchens, baths and basements across Baltimore County.

Two policies, two different problems

Most homeowners ask one question, "are you insured," and accept one answer, "we are." Two separate policies hide inside that question, and they protect you from two unrelated disasters.

General liability answers for damage the contractor causes while working on your house. A sledge through a radiator pipe, a ladder into the neighbor's windshield. Workers' compensation answers for injury to the people doing the work. If a laborer comes off a scaffold in your side yard, that is the policy that covers his medical care and his lost wages.

Neither one is a warranty on the work. A general liability policy is built to exclude the contractor's own faulty workmanship. Crooked cabinets are a contract problem. A flooded dining room is an insurance problem.

  • What it responds to. General liability: Damage the contractor causes to your property or a neighbor's during the job. Workers' compensation: Injury to the contractor's own workers on your job.
  • Who the money goes to. General liability: You, your neighbor, or anyone else the contractor damages. Workers' compensation: The injured worker, for medical care and lost wages.
  • Where the Maryland requirement comes from. General liability: Business Regulation Section 8-302.1, tied to the home improvement license. Workers' compensation: Labor and Employment Section 9-402, tied to having covered employees.
  • How you confirm it independently. General liability: The agency named on the certificate, plus the Insurance Administration's company search. Workers' compensation: The Workers' Compensation Commission's coverage verification search.
  • What it will not do. General liability: Pay to redo bad workmanship. Workers' compensation: Pay anyone other than an injured worker.

Maryland ties general liability directly to the license. Section 8-302.1 of the Business Regulation Article requires an applicant for a contractor license to carry general liability coverage at a minimum amount the statute names, and requires a licensed contractor to keep carrying it. That minimum is a licensing floor, not a figure sized to your project, so read the limits on the certificate against the job in front of you.

Workers' compensation works differently. It does not attach to the home improvement license at all. It attaches to whether the business has covered employees, which is a question the contractor answers about itself and a question you are allowed to test.

A certificate of insurance is issued by the insurer, not by the contractor

This is the part that changes how you read everything that follows. Maryland defines a certificate of insurance in Section 19-116 of the Insurance Article, and the definition is narrow. A certificate is a document, however titled, that is prepared or issued by an insurer or an insurance producer as evidence of property or casualty coverage. A producer is the agent or broker. The contractor is not in that definition anywhere.

So a letter on company letterhead saying "we carry full coverage" is not a certificate. Neither is a screenshot of a declarations page or a line in a proposal. The document you want came out of an agency's system.

The statute goes further. Nobody may prepare or issue a certificate unless the form has been filed with and approved by the Insurance Commissioner, with one practical exception: standard forms adopted by ACORD or by the Insurance Services Office are deemed approved. That is why almost every certificate you will ever see in Maryland is an ACORD form. If what lands in your inbox is not one, ask why.

Three more clauses in the same section are worth knowing by heart. A person may not alter or modify an approved certificate. A person may not prepare or issue a certificate they know contains false or misleading information, or one purporting to amend or extend the coverage the underlying policy actually provides. And a certificate prepared, issued, or required in violation of the section is void and unenforceable. A contractor who opens the PDF, edits a date or a limit, and forwards it to you has not been sloppy. He has done something Maryland law prohibits, and the paper is worth nothing.

That is the honest reason a contractor-supplied PDF is not proof. It can be stale, printed in March and still circulating in October. It can be altered. It can be a forgery nobody ever checks.

Reading an ACORD 25 from the top down

The form you will receive is almost always the ACORD 25, Certificate of Liability Insurance. Its layout has been stable for years, and the current edition reads the same way as the one before it.

The date in the upper right corner tells you when the snapshot was taken. Nothing on the form is a statement about today.

The PRODUCER box, upper left, names the agency that issued it, with a contact name, a phone number, and an email address. This is the most useful box on the page, because it tells you who to call. The INSURED box underneath names the policyholder, and matching that name is the whole ballgame. To the right, INSURER A through INSURER F list the carriers actually providing coverage, each with an NAIC number, which is how you look a carrier up without guessing at a trade name.

The body of the form is a grid of coverage rows: Commercial General Liability, Automobile Liability, Umbrella and Excess, and Workers Compensation and Employers' Liability. Each row carries a policy number, a policy effective date, a policy expiration date, and limits. Two narrow columns sit between the coverage type and the policy number, headed ADDL INSD and SUBR WVD. Those two matter more than their width suggests.

DESCRIPTION OF OPERATIONS near the bottom is free text. On a good certificate it names your project address and says which endorsements apply. The CERTIFICATE HOLDER box at the bottom left is where your name and address go, and the CANCELLATION box beside it says that if a policy is cancelled before its expiration date, notice will be delivered in accordance with the policy provisions.

Finally, read the fine print across the top, because the form is unusually honest about its own limits. It states that the certificate is issued as a matter of information only and confers no rights upon the certificate holder, that it does not amend, extend, or alter the coverage afforded by the policies below, and that it does not constitute a contract between the insurer, the producer, and the holder. Maryland law says the same thing in Section 19-116.

The named insured has to match the name on your contract

A policy protects the entity named on it. Nothing else. This is where most certificates quietly fail, and the failure is boring enough that nobody catches it.

The contract names a limited liability company. The certificate names a sole proprietorship with a similar trading name. Maybe those are the same people and the LLC is new and the policy never moved. When a claim comes in against the entity you signed with, the carrier looks at its own named insured and finds a different name.

Run three documents side by side and make the names agree:

  • The contract you are being asked to sign, including the signature block and any entity suffix.
  • The MHIC record, pulled on the Commission's license search, with the licensed trading name read exactly as it appears.
  • The INSURED box on the certificate.

Trade names complicate this without making it wrong. A certificate reading "Legal Entity LLC dba Friendly Trade Name" is fine. A certificate showing only the trade name, with no legal entity anywhere on it, is not, and the fix takes an agent about ten minutes.

While you have the contract open, check that the MHIC license number is on it. Maryland sets out what a home improvement contract must contain, including the contractor's name, address, and license number. A contract missing the number and a certificate in a mismatched name tend to show up together.

Policy dates, limits, and the number that may already be spent

The POLICY EFF and POLICY EXP columns have to span your job, including the stretch after the last tile goes in when somebody comes back for the punch list. A policy that expires in the sixth week of an eight week project is a gap you agreed to without being told.

Read the dates against the date in the corner of the form. A certificate printed four months ago proves what was true four months ago. If the policy renews mid-project, ask the agency to send a fresh certificate at renewal and make that a condition of the next progress payment. It is an easy thing to ask for and a revealing thing to be refused.

Limits deserve a closer look than they usually get. General liability carries an each-occurrence limit and a general aggregate. The aggregate is the ceiling for the whole policy year across every customer that contractor has, not a number reserved for you. If that contractor flooded a finished basement on another job in Glen Burnie in February, your project shares what is left. The form admits as much in its own footnote, warning that the limits shown may have been reduced by paid claims.

Also check whether the general liability row is marked OCCUR or CLAIMS-MADE. An occurrence policy responds to damage that happened during the policy period, whenever the claim surfaces. A claims-made policy responds only if the claim is reported while coverage is in force. For remodeling, where a leak behind a wall can take two winters to announce itself, that difference is not academic.

Then look at what is missing. A filled-in Commercial General Liability row above a blank Workers Compensation row is telling you something, and it may be telling you the truth, since a one-person business with no employees may not be required to carry it. Have that conversation rather than skipping the box.

Additional insured and certificate holder are not the same thing

Maryland defines a certificate holder as any person, other than the policyholder, who requests, obtains, or possesses a certificate. That is the entire definition. It makes you a person who has a piece of paper.

An additional insured is something else. It is a status granted by the policy itself, through an endorsement, and it gives you a direct claim against the contractor's carrier rather than a claim against the contractor. The ACORD form spells out the distinction in a bold box near the top: if the certificate holder is an additional insured, the policy must have additional insured provisions or be endorsed, and a statement on the certificate does not confer rights in place of that endorsement. The ADDL INSD column being checked is a description, not a grant.

If being an additional insured matters to you, ask for a copy of the endorsement and read whose interest it protects and for how long. On a large addition it is a normal request. On a single bathroom, many homeowners decide the certificate check alone is proportionate. Either way, know which you have. The SUBR WVD column works the same way, flagging a waiver of subrogation that also lives in the policy rather than on the certificate.

One more trap sits in the CANCELLATION box. Maryland law says the terms of a cancellation or nonrenewal notice are governed by the policy and may not be altered by a certificate. Being listed as the certificate holder does not obligate anyone to tell you when the policy goes away. If continuous coverage matters to you, the mechanism is a fresh certificate on a schedule, not a hope that someone will call.

How to confirm coverage, in the order that costs the least time

Four steps, about twenty minutes total, in this order for a reason.

Start with the agency. Call the number in the PRODUCER box, give them the certificate number and the policy number, and ask three things: is this policy in force today, does it cover residential remodeling work in Maryland, and will you send the certificate to me directly. That last request matters most, because a certificate arriving from the agency's own email has not passed through the contractor's hands.

Verify the agency and the carrier independently. The Maryland Insurance Administration runs a company and producer search covering insurers licensed in Maryland and producers currently or previously licensed here. Company results show the NAIC number, state of domicile, active or inactive status, and the lines of business the company may write. Match the NAIC number on the certificate against the record. A phone number printed on a forged certificate rings wherever the forger wants it to ring, so confirming the agency exists before you dial is worth the extra minute.

Check workers' compensation separately, through the Workers' Compensation Commission's free coverage search rather than the contractor's paperwork.

If something does not add up, say so in writing to the contractor first, then to the regulator. The Insurance Administration takes complaints about insurers and producers, the Home Improvement Commission takes complaints about contractors, and Section 19-116 gives the Commissioner authority to investigate anyone reasonably believed to be violating it.

Workers' compensation is the check most homeowners skip

The Maryland Workers' Compensation Commission runs a free employer coverage verification search. Federal tax identification number is the fastest and most reliable route, and legal trading name plus business address also works. Results are specific to a coverage date, and you cannot ask about a date later than today. Read the disclaimer, because a blank result is not a finding. It may mean your terms did not match, or that coverage has not been reported. Treat no result as a reason to ask the agent, not as a verdict.

Understand what the law presumes while you do it. Labor and Employment Section 9-402 requires each employer to secure compensation for all covered employees. Section 9-202 presumes that an individual in the service of an employer under an express or implied contract of hire is a covered employee, and overcoming that presumption requires the employer to establish that the person is an independent contractor at common law or specifically exempt by statute.

Construction gets a second layer. The Maryland Workplace Fraud Act applies to only two industries, construction services and landscaping, and construction services is defined broadly enough to include building, improving, painting, altering, and repairing real property. Under Section 3-903, work performed for pay is presumed to create an employer-employee relationship unless the worker is an exempt person or the employer can show all of the following: the worker is free from control and direction in fact and under the contract, the worker customarily works in an independent business of the same nature, and the work is outside the usual course of the employer's business or performed away from the employer's place of business. All three have to hold. A worker told when to arrive and what to build is neither free from control nor running an independent business of the same kind, so "they are all subcontractors" is a claim that has to survive a real test, not a filing decision.

There is one legitimate blank on the form, and it has a box of its own. The workers' compensation row asks whether any proprietor, partner, executive officer, or member is excluded, yes or no. Maryland lets corporate officers and LLC members elect out under Section 9-206, and a sole proprietor can decline to be a covered employee. An owner who has opted out is breaking no rule. You still want to know, because a two-person company where both owners elected out and nobody is an employee may carry no workers' compensation policy at all. That is lawful, and it changes what happens if one of them gets hurt in your basement.

What happens if an uninsured worker is hurt on your property

Follow the sequence, because it ends closer to you than people expect.

The injured worker files a claim with the Workers' Compensation Commission. If the employer carried no coverage, the Commission can still issue an award, and when the uninsured employer defaults on it, the claimant can apply to the Uninsured Employers' Fund, whose board the General Assembly created in 1983 to protect workers whose employers are not insured. The Fund pays, then pursues the employer, who also faces a misdemeanor charge under Section 9-1108 for failing to secure coverage in force when a policy cancellation takes effect.

None of that necessarily stops at your property line. Section 9-901 lets an injured covered employee sue a person other than the employer who is liable for the injury, and Section 9-902 lets the insurer or the Uninsured Employers' Fund bring that third-party action itself to recover what it paid. If the injury had anything to do with the condition of your house, a rotten deck board or an unlit basement stair, you are a candidate for that action. Your own homeowners liability coverage is what defends you, and your own premiums feel it afterward.

Could you be treated as the employer? Usually not. Section 9-508 makes a principal contractor liable for a subcontractor's covered employees, but only where the work is part of the business, occupation, or trade of that principal contractor. A homeowner remodeling the house they live in is not in the remodeling trade, so the section points at general contractors rather than at you.

The exposure changes when you cut out the company. Hire a day laborer directly, pay cash, direct the work yourself, and Section 9-202's presumption of covered employment points straight at you. A casual employee is not a covered employee under Section 9-205, but casual is a determination the Commission makes on the facts, not a label you get to apply to a three-week job.

Before any significant project, call your own insurance agent and ask two questions. What does my policy do if someone working on the house is injured here, and what does it do if a contractor damages a neighbor's property from my site.

Where insurance stops and the Guaranty Fund starts

Insurance covers damage and injury. It does not cover a contractor who takes a deposit and disappears, or who leaves a half-framed addition open to the weather. Maryland handles that failure through a different mechanism with a hard gate on it.

The Home Improvement Commission's Guaranty Fund reimburses homeowners for actual losses from work that was unworkmanlike, inadequate, incomplete, or abandoned, measured as the cost of restoration, repair, replacement, or completion. It does not pay consequential damages, attorney's fees, or court costs. It does not reimburse money paid to an unlicensed contractor.

Here is the gate: the contractor must have been licensed when the contract was signed. The Fund is not available to homeowners who hired unlicensed contractors.

The rest of the rules shape what a claim is worth. Recovery per claimant is capped and cannot exceed what you actually paid. A separate cap applies across all claims against a single contractor, and when approved claims exceed it, every claimant takes the same percentage. Claims must be filed within three years of when the loss was discovered or should have been discovered. Money you recover from another source, including the contractor's own insurer, is deducted from the award. You file a complaint first, and a claim form follows only if the complaint does not resolve.

The license is what opens that door. Hire outside it and the Guaranty Fund closes, and an unlicensed operator is also the one least likely to have real policies behind the paper.

The questions worth asking before you sign

Ask for the certificate to come from the agency rather than from the contractor. One sentence does it: please have your agent email the certificate directly to me, with my name and the project address in the certificate holder box.

Ask whether the named insured matches your contract exactly, and if it does not, ask which entity you are actually hiring.

Ask whether workers' compensation is carried, and if not, ask who is doing the physical work and under what status. A clear, unbothered answer about owners who have elected out is reassuring. Vagueness is not.

Ask whether every subcontractor carries its own coverage, and how that gets verified before anyone starts. A general contractor's certificate says nothing about the tile setter's crew.

Ask whether the general liability policy carries exclusions that would matter here, such as a residential work exclusion or an endorsement conditioning coverage on subcontractor insurance, and put that question to the agent rather than the salesperson.

One question belongs on a different list. If you are paying for the work through an insurance claim, a roof after a storm or water damage in a finished basement, know that a contractor who is not a licensed public adjuster may not negotiate that claim with your insurer, prepare the claim for you, or advise you about your coverage. The Maryland Insurance Administration says so plainly. A contractor may prepare an estimate of the loss, discuss it with you, and answer the insurer's questions about it. Anyone offering to handle your claim has stepped over a line the state draws on purpose.

Remodel Now remodels kitchens, bathrooms, and basements in Towson and throughout Baltimore County, and takes on home remodeling across the Baltimore-Washington Metro Area. Any contractor you are considering should be able to put a current certificate, issued by their agency, in your hands before a contract is signed. To start that conversation, the number is (301) 798-4696.

Verification takes less time than choosing a faucet. A phone call to an agency, a name comparison across three documents, two free lookups. Do it before the deposit, because afterward your leverage is gone and the only question left is whose insurance pays.

Sources

Frequently Asked Questions

How do I verify a contractor's insurance in Maryland?

Ask for a certificate of insurance and then confirm it with the agency, not with the contractor. Call the phone number in the PRODUCER box on the certificate, give the certificate and policy numbers, and ask whether the policy is in force today, whether it covers residential remodeling in Maryland, and whether the agency will email the certificate to you directly. Then check the carrier against the Maryland Insurance Administration's company and producer search, and check workers' compensation separately through the Workers' Compensation Commission's free employer coverage verification.

Is the certificate of insurance my contractor emailed me enough proof?

No. Maryland's Insurance Article defines a certificate as a document prepared or issued by an insurer or an insurance producer, which means the contractor is not the source. A forwarded PDF can be months old, it can be altered, or it can be a forgery. The same statute prohibits altering or modifying an approved certificate and prohibits issuing one known to contain false or misleading information, and it says a certificate issued in violation of the section is void and unenforceable. A certificate that arrives from the agency's own email address is the version worth relying on.

What does the named insured on the certificate have to match?

It has to match the exact legal entity on your contract. Put three documents side by side: the contract signature block, the MHIC license record, and the INSURED box on the certificate. A policy written for a sole proprietorship will not respond when a claim is filed against the LLC you actually signed with. A certificate reading "Legal Entity LLC dba Trade Name" is fine. A certificate showing only a trade name with no legal entity is not, and an agent can correct it in minutes.

What is the difference between a certificate holder and an additional insured?

A certificate holder, in Maryland's definition, is any person other than the policyholder who requests, obtains, or possesses a certificate. It gives you a piece of paper and nothing else. An additional insured has a status granted by the policy itself through an endorsement, which creates a direct claim against the contractor's carrier. The ACORD form states this outright: if the certificate holder is an additional insured, the policy must have additional insured provisions or be endorsed, and a statement on the certificate does not confer rights in place of the endorsement. Ask for the endorsement if the status matters to you.

Does a Maryland remodeling contractor have to carry workers' compensation?

It depends on whether the business has covered employees, not on whether it holds a home improvement license. Labor and Employment Section 9-402 requires each employer to secure compensation for all covered employees, and Section 9-202 presumes that someone working under an express or implied contract of hire is a covered employee. The Workplace Fraud Act adds a construction-specific presumption that work performed for pay creates an employer-employee relationship unless a three-part test is met. A company whose only workers are owners who have elected out under Section 9-206 may legitimately carry no policy, which is worth knowing before work starts.

What happens if an uninsured worker is injured at my house?

The worker files a claim with the Workers' Compensation Commission. If the employer had no coverage and then defaults on the award, the claimant can apply to Maryland's Uninsured Employers' Fund, which pays and then pursues the employer. The employer also faces a misdemeanor charge under Section 9-1108 for failing to secure coverage in force when a cancellation takes effect. Separately, Section 9-901 lets the injured worker sue a third party who is liable for the injury, and Section 9-902 lets the Fund or an insurer bring that action to recover what it paid. If the condition of your property contributed, your own homeowners liability coverage is what responds.

Am I legally the employer if I hire a contractor who has no workers' compensation?

Usually not. Section 9-508 makes a principal contractor liable for a subcontractor's covered employees only where the work is part of the business, occupation, or trade of that principal contractor, and a homeowner remodeling their own house is not in the remodeling trade. The picture changes if you hire individuals directly, pay them yourself, and direct the work, because the presumption of covered employment in Section 9-202 then points at you. A casual employee is excluded under Section 9-205, but casual is a determination the Commission makes on the facts, not a label you choose.

Does general liability insurance cover bad workmanship?

No, and that is by design. General liability responds to damage the contractor causes, such as water through a ceiling or a ladder through a neighbor's window. It is built to exclude the contractor's own defective work, because insurers do not guarantee workmanship. Maryland handles that failure through the Home Improvement Commission's Guaranty Fund, which reimburses actual losses from unworkmanlike, inadequate, incomplete, or abandoned work and is available only when the contractor was licensed at the time the contract was signed. Consequential damages, attorney's fees, and court costs are not covered.

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