How should a contractor respond to an MHIC compliance audit?
Short answer. Cooperate and respond by the deadline with organized records: signed contracts, insurance certificates, Guaranty Fund receipts, and business records. Under COMAR 09.08.01.27, failing to respond is itself grounds for discipline.
- COMAR 09.08.01.27
Work it through
You're the contractor. Pick what you'd do, then see how each choice plays out.
The MHIC conducts random compliance audits. You receive a letter: the Commission is requesting copies of all contracts executed in the past 12 months, proof of current insurance, and your Guaranty Fund payment receipts.
You have 30 days to respond.
- Correct
MHIC compliance audits are a normal part of the regulatory process. Contractors with organized records handle them in a few hours. This is where all that documentation pays off: signed contracts, insurance certificates, Guaranty Fund receipts, and business records should be easily accessible. Respond within the deadline — COMAR 09.08.01.27 applies here too. A non-response to a compliance audit is a fast track to disciplinary action.
- Wrong
MHIC licensing gives the Commission regulatory authority over your business practices. Compliance audits are within their authority. Fighting an audit looks like you have something to hide and costs legal fees that exceed the time needed to simply comply. If your records are in order, the audit is a non-event. If they're not, the lawyer can't create documentation that doesn't exist.
All 10 mhic licensing & renewal questions
- What should a new MHIC contractor do before the first job?
- What happens if your contractor liability insurance lapses in Maryland?
- How do you meet the MHIC financial solvency requirement at renewal?
- What does the MHIC require to renew a contractor license?
- Do you need to update your MHIC license when you form an LLC?
- Do you have to tell the MHIC when your business address changes?
- What if the MHIC lookup shows your old business name?
- Why does the MHIC review your credit report?
- Can unpaid supplier bills put your MHIC license at risk?
- How should a contractor respond to an MHIC compliance audit?