Connecticut Contractor Insurance Requirements
Your Connecticut registration needs a minimum of general liability, and your building permit needs proof of workers’ compensation.
This article is general information about how insurance usually works in Connecticut. Your policy’s own wording decides what it covers. Ask us about yours.
Short Answer
Registration as a home improvement contractor requires liability insurance, and an LLC must register in its own name. A building permit requires proof of workers’ compensation for employees working on the site. Work without registration is a criminal offense, with civil penalties up to $1,500 per violation.
Who Must Register as a Home Improvement Contractor
Contractors who work on homes of six units or fewer, condos or common interest communities, and charge more than $1,000 in any 12 months must register. A subcontractor who works only for a registered home improvement contractor does not need to register.
What Registration Requires
- Liability insurance.
- At least $20,000 of general liability insurance, with the insurer name and policy number.
- The correct entity.
- A contractor that signs contracts as an LLC must register the LLC. An individual registration does not cover it.
- State registry.
- A business entity must register with the Secretary of the State before applying.
- Application fee.
- The home improvement application fee is $220 and is not refundable.
New Home Builders
New home builders need a separate New Home Construction Contractor registration, also with at least $20,000 of liability insurance.
Specialized Registrations
Radon, underground storage tank removal, swimming pool and mold remediation work have their own specialized registrations.
Penalties
Doing home improvement work without registration is a criminal offense, and the state may impose civil penalties up to $1,500 per violation.
Workers’ Compensation and Permits
With few exceptions, every Connecticut employer must carry workers’ compensation insurance. Anyone pulling a building permit must first show proof of that coverage for employees working on the site. An owner or sole proprietor who will not act as general contractor files Form 7A instead.
Vehicles
A personal auto policy generally excludes business use. For your work vehicles, see commercial auto insurance.
Frequently Asked Questions
Do Connecticut contractors need general liability insurance?
Yes. A home improvement contractor must carry at least $20,000 of general liability insurance to register.
Does a certificate of insurance for a building permit have to be workers’ compensation?
Yes. The certificate for a permit must be workers’ compensation insurance, not liability or disability.
Does a subcontractor need to register?
A subcontractor who works only for a registered home improvement contractor does not need to register.
What happens if I work without registration?
It is a criminal offense, and civil penalties can reach $1,500 per violation.
What if I cannot get general liability insurance?
One insurer’s no is one answer from one insurer. Contact us. Our practice includes commercial risks that other agencies find hard to place. We reach the surplus lines market through licensed surplus lines brokers. No agency can promise a placement.
If a standard insurer says no, your policy may be placed this way, and it works a little differently. Some hard to place risks are insured by surplus lines carriers. These carriers are not licensed by the state as admitted insurers. Their policies can cost more, cover less or differently, and follow different cancellation and nonrenewal notice rules. They are generally not covered by the state insurance guaranty fund if the carrier fails. Surplus lines coverage is placed through a licensed surplus lines broker. We explain the differences to you in writing before you decide.
Sources
- Connecticut Department of Consumer Protection, Home Improvement Contractor Application
- Connecticut Department of Consumer Protection, Home Improvement and New Home Construction in Connecticut (guide, undated)
- Connecticut Workers’ Compensation Commission, Directions for Forms 7A, 7B, 7C
- Connecticut Workers’ Compensation Commission, About workers’ compensation insurance
- Connecticut Insurance Department, Auto Insurance Information Center