Proof stays on file
Insurance is not a one-time application item. The rules say a certificate by the insurer or other appropriate evidence of coverage "shall be maintained with the" contractor division "and shall be a condition of renewal" (Rule 553-4-.06(4)). It is filed with the division, not only with the project owner. Treating insurance as needed only at the initial application is a listed common error.
The 30-day notice
A licensee acting as qualifying agent must notify the division in writing within 30 days of any change in the information on file, including insurance coverages (Rules 553-4-.06(4) and 553-3-.01(4)). Changing carriers triggers it. Ten days and 60 days are wrong, and "at the next renewal" ignores the duty entirely.
Worked date: a new carrier's policy takes effect March 1. March 1 + 30 days = March 31. The distractors each misuse another period: March 8 applies 7 days (the OSHA recording deadline), March 11 applies 10 days, and April 30 applies 60 days.
Net worth
- General Contractor: minimum net worth $150,000 (Rule 553-4-.01(3)(d)).
- Limited Tier: minimum net worth $25,000 (Rule 553-4-.05(3)(d)).
Swapping the two is a listed common error. Do not confuse net worth with insurance: $300,000 is the Residential-Basic liability minimum and $500,000 is the GC liability minimum.
The correct Limited Tier pairing is net worth $25,000 and liability $500,000 (Rule 553-4-.05(3)(d) and (4)). Pairing $25,000 with $300,000 assumes the smaller license gets smaller insurance; it does not. $150,000 net worth belongs to the full GC license, and $300,000 liability belongs only to Residential-Basic.
The $1,000,000 cap and change orders
A Limited Tier license is limited to contracts of no more than $1,000,000 (Rule 553-4-.05(8)), and change orders may not push a contract over the cap (553-4-.05(10)).
Example: a $950,000 contract plus a $75,000 change order = $1,025,000, which exceeds the cap, so the change order is not allowed. Treating change orders as excluded from the cap is a listed common error. Neither extra net worth nor extra liability coverage lifts the cap.