Maryland Business Insurance Requirements
Business insurance requirements in Maryland. What the State requires, and what your contracts require instead.
Most guidance on this blurs two different things: what Maryland requires by law, and what a general contractor or a county procurement office requires before they let you on the job. Both matter, the penalties are different, and several Maryland requirements changed in 2024 in ways a lot of published guidance has not caught up with.
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What Maryland Requires
The requirements that actually catch Maryland businesses.
Workers Compensation
Maryland requires coverage from your first employee, part time workers included. Paid corporate officers and LLC members are covered unless they formally elect out. If you hire a subcontractor for work that is part of your regular business, you can be treated as the employer of its injured workers.
Contractor Licensing
Maryland has no general contractor license classes like Virginia. Residential remodeling and repair falls under the Maryland Home Improvement Commission, which now requires 500,000 dollars of general liability, up from 50,000 in 2024. Licensed electricians, plumbers and HVACR contractors answer to their own boards, each with its own liability minimum.
Commercial Auto
Maryland requires 30/60/15 liability, plus personal injury protection and uninsured motorist coverage. A lapse costs 200 dollars per vehicle for the first 30 days, then 7 dollars a day up to 3,500 a year, and the registration is suspended. Transferring the title does not avoid the fine.
Certificates of Insurance
Maryland puts it in statute: a certificate of insurance is not a policy, and it cannot amend, extend or alter coverage. A certificate that tries to is void. If your contract requires additional insured, waiver of subrogation, or primary and non contributory wording, collect the endorsement rather than the certificate.
What Your Contracts Require
Montgomery County sets insurance contract by contract, but the pattern repeats: Maryland statutory workers compensation, employers liability, general liability often at one million per occurrence, the County as additional insured, and primary wording. Private general contractors across the region ask for the same shape. The practical requirement is almost always stricter than the legal one.
Penalties for Getting It Wrong
Failing to carry workers compensation can bring a Commission penalty of up to 25,000 dollars, up to another 25,000 if you ignore an order to get coverage, and a misdemeanor charge of up to 5,000 dollars and a year in jail. Officers who knew can be personally liable. Unlicensed home improvement work is a misdemeanor, with civil penalties of up to 5,000 dollars per violation.
Not sure which of these apply to your business? That is the conversation to have before a renewal or a bid, not after a claim. Reach out and we will walk your operation through it.
Recently Changed
The rules moved in 2024. A lot of published guidance did not.
In 2024 Maryland raised the home improvement liability minimum from 50,000 to 500,000 dollars, raised the penalty for running without workers compensation to 25,000 dollars, and raised uninsured vehicle fines. Plenty of published guidance still shows the old numbers. And every employer with a Maryland employee now has to register for FAMLI, with contributions starting January 1, 2027.
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Maryland, DC and Virginia
Maryland is not Virginia, and the difference is expensive.
We work across all three jurisdictions, and this is where we see the most avoidable mistakes. Workers compensation starts at one employee in Maryland and the District and at three in Virginia. Auto minimums run 30/60/15 in Maryland, 25/50/10 in DC and 50/100/25 in Virginia. A business that operates across the line carries the strictest rule it touches, not the friendliest one.
Class codes that match the payroll
Whether a BOP still fits
County and university contract requirements
Owner exclusions, understood
Think you are covered correctly now?
Let us take a look at your current coverage.
Bring us your existing policies. We'll tell you what's working, what's missing, and what's costing you money you don't need to spend. No pitch deck. No sales pressure. Just a real second opinion from people who do this for a living.
FAQ
Questions we hear from business owners.
Got a different question? Call us directly: (301) 431-0000. Or email us at info@capitolbenefits.com. The fastest way to answer a real question is to ask a real person.
Not sure your Maryland coverage meets the requirement?
Send us your certificates and whatever the contract or the county is asking for. We will check them against what Maryland actually requires, then quote the gaps.
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