PA Contractor License + Insurance (2026)

HICPA registration — the state baseline

Pennsylvania doesn’t issue a statewide general contractor’s license the way states like Florida or California do. Instead, the Home Improvement Consumer Protection Act (HICPA, Act 132 of 2008) requires home-improvement contractors to register with the Pennsylvania Office of the Attorney General before they perform home-improvement work.

The $5,000 figure people quote is not a per-job threshold. HICPA exempts only a person whose home-improvement work totaled less than $5,000 during the previous taxable year. If your total was $5,000 or more last tax year, you register — and once you’re registered, HICPA’s contract rules apply to any home-improvement job where the total price agreed with the owner is more than $500.

HICPA defines home improvement broadly: repair, replacement, remodeling, demolition, renovation, installation, and similar work on a private residence or the land next to it, including driveways, pools, porches, garages, roofs, siding, insulation, flooring, patios, fences, painting, and doors and windows. Construction of a new home is excluded, and so is work for commercial or business use somewhere other than a private residence. Registration is renewed every two years, and your registration number must appear in your advertising and on every contract, estimate, and proposal.

Required insurance under HICPA

To register, a contractor must show proof of liability insurance of at least $50,000 for personal injury and at least $50,000 for property damage caused by the work. HICPA also writes the insurance into the job paperwork: a home-improvement contract generally must include the contractor’s agreement to keep that coverage and state the amount of insurance in force when the contract is signed.

$50,000 is the legal floor. It’s nowhere near the practical floor for contractor general liability. Most general contractors won’t put a sub on a job at $50,000 limits; the usual request is $1,000,000 per occurrence and $2,000,000 aggregate. A certificate at the legal minimum satisfies HICPA and not much else.

Local rules — Philadelphia, Pittsburgh, and your township

HICPA limits what Pennsylvania municipalities can add for home-improvement contractors. Section 12 of the act says state registration precludes a municipality from charging a fee for, registering, or licensing a home-improvement contractor. Municipalities can still require building permits, enforce the building code, and ask for proof of workers’ compensation, and the act leaves in place the testing- or certificate-based licensing for electricians, plumbers, and similar trades that existed when it took effect, plus local liability-insurance standards adopted before January 1, 2006. Commercial and new-construction work falls outside HICPA, so a municipality’s own contractor licensing, where it has one, can still apply there.

Philadelphia shows how that plays out. The Department of Licenses and Inspections (L&I) issues a Contractor License for construction, demolition, and repair work, renewed every year. A business that only does home-improvement work on existing one- and two-family homes doesn’t need that license; it submits as a PA Home Improvement Contractor to get permits. Electrical, plumbing, and fire-suppression work need their own city licenses either way. Both paths require a certificate of insurance showing at least $500,000 general liability per occurrence, $300,000 automobile liability, and workers’ compensation of $100,000 per accident, $100,000 per employee, and a $500,000 policy limit, and you must be current on City taxes. Those are the figures L&I lists as of October 2026; check the city’s page before you apply.

Pittsburgh runs its own licensing and permitting through the Department of Permits, Licenses, and Inspections (PLI). What applies depends on the type of work and whether it falls under HICPA, so check with PLI before you take a job there.

In the suburban townships and boroughs, expect permit requirements rather than a second contractor license for home-improvement work, plus any trade licensing the municipality runs. Requirements differ from one municipality to the next, so check with each one where you pull permits. Tell us where you work and we’ll match the policy to what those offices ask for.

What general contractors expect on a sub COI

Most general contractors writing residential or light commercial work will request a certificate of insurance from any sub before letting them on site, and GCs hold payment until a current certificate is on file. An expired COI can hold up your check even after the work is done, so keep renewal dates in front of you. The standard request:

• General liability — $1,000,000 per occurrence, $2,000,000 aggregate.
• Workers’ compensation — statutory limits, $1,000,000 employer’s liability.
• Commercial auto — $1,000,000 combined single limit if the sub drives owned vehicles.
• Additional insured — the GC and often the property owner named as additional insured by endorsement (CG 20 10 or similar).
• Waiver of subrogation in favor of the GC.
• Primary and non-contributory wording on the GL endorsement.

Workers’ compensation and Act 72

Pennsylvania law requires workers’ compensation coverage for almost every employer with at least one employee, including part-time workers and family members, unless every worker falls into a narrow excluded category. The Department of Labor and Industry warns that going without can lead to criminal prosecution, with imprisonment and substantial fines for each day of noncompliance, on top of lawsuits over the injury itself.

Sole proprietors and general partners with no other employees are not required to carry workers’ comp on themselves under PA law. They can buy it as an option, and many do — partly for income protection and partly because the general contractor above them on the job will want to see it on the COI. How the rules apply to an LLC member depends on how the business is set up, so confirm it with your attorney before you skip the policy.

The harder question is whether the people you hire count as subcontractors at all. Pennsylvania’s Construction Workplace Misclassification Act (Act 72 of 2010) says a person paid for construction work is an independent contractor for workers’ comp and unemployment purposes only if they have a written contract, are free from your control over how the work is done, and are customarily engaged in an independently established business. That last test has its own checklist: they own the tools and equipment for the job, can make a profit or take a loss, work through a business they have an ownership interest in, keep a business location separate from yours, have done or offer the same work for others, and carry liability insurance of at least $50,000 for the term of the contract. Someone who doesn’t meet those tests is not an independent contractor under the act and can be treated as your employee for workers’ comp purposes, so collect a written contract and their certificate before they start.

Bonds — what HICPA doesn’t require, but customers do

HICPA registration requires proof of insurance, not a surety bond, but several situations call for one. On Commonwealth construction contracts, 62 Pa.C.S. § 903 of the Procurement Code requires a performance bond and a payment bond, each equal to 100 percent of the contract price, once the award exceeds $100,000, and requires the agency to take performance security of at least 50 percent of the contract price on contracts between $25,000 and $100,000 (the statute adjusts these dollar thresholds each year for construction-cost inflation, so the bid documents control). Counties, school districts, municipalities, and municipal authorities follow the Public Works Contractors’ Bond Law of 1967, which requires a performance bond and a payment bond (or equivalent bank security), each equal to 100 percent of the contract amount, before they award a public-works contract over $10,000. Some municipalities ask for a license or permit bond for work outside HICPA, such as commercial work. Private commercial owners on larger projects often require performance bonds as a condition of award.

Surety bonds are issued through carriers that bond Pennsylvania contractors and are priced based on the contractor’s financial statements and trade. Our contractor surety bond guide breaks down each bond type and how it is underwritten. Bid bonds and small license bonds can often be issued quickly. Performance bonds on larger jobs depend on the contractor’s pre-qualification with the surety.