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How to Get Your New Mexico Contractor License

4-minute read

A New Mexico contractor license lets you work on bigger projects, like this contractor in the middle of demoing a door frame.
Emily Thompson

Emily Thompson

3 December 2019

Let’s face it: you’d make a great contractor. You’re handy, driven, and love working with people. So isn’t it time you get your New Mexico contractor license?

The process to get a New Mexico contractor license can be a little tricky, and there’s a lot of information out there. That’s why we created this simple how-to guide that’ll get you through the process—quickly and easily.

Ready to get started?

Why Do I Need a New Mexico Contractor License?

If you do any construction, electrical, mechanical, plumbing work, or if you handle liquefied petroleum gas, you need to get a license. In New Mexico, the state is pretty cut and dry—it’s the law. They’re pretty serious about it too. If you get caught working without a license, the state can stop your project and file criminal charges. Yikes!

The good news is getting licensed can benefit both you and your business. Sure, it’s a requirement, but it also can:

  • Help you get bigger projects that pay more. Licensed contractors make a nice salary, especially if they manage large construction sites or work with electrical and plumbing systems. There’s a lot of work for licensed contractors in New Mexico too.
  • Make you appear credible and professional. Some jobs are tough to break into. Fortunately, a contractor isn’t one of them. Once you get your license, homeowners will see you as credible and trustworthy. With a license, they’ll know you have the training and experience to do quality work.
  • Protect your business against the unexpected. Applying for a license is a good time to shop for business insurance, including general liability insurance and workers’ compensation (if you have employees). When you register your business, the state will ask you for proof of having workers’ compensation, so you might as well get a plan now.

Business insurance helps protect your employees and property. You don’t want to be unprepared—a sudden accident or loss could impact your livelihood.

Getting a license is a no-brainer, right? Now let’s cover how you can get one.

Getting a Contractor License in New Mexico: What You Need to Know

First step? Know where to go. The Construction Industries and Manufactured Housing Division (CID) within the New Mexico Regulation & Licensing Department handles licensing, but you can find all forms and information on the PSI website.

To apply, you’ll need:

  • A completed and notarized qualifying party certificate.
  • A notarized work experience verification form.
  • A completed application form.
  • Proof of a CID contractor license code bond.
  • Proof of having workers’ compensation insurance.
  • Proof of financial responsibility.
  • A New Mexico tax ID number from the last year.
  • An application fee payable to PSI (the amount varies based on which license classification you’re applying for).

If your business is a corporation, LLC, or partnership, you’ll also need to register it with the Secretary of State by calling 1-800-477-3632 or visiting 325 Don Gaspar, Suite 300 Santa Fe, New Mexico.

1. Get business insurance.

Take a break from the licensing process to shop for business insurance. Becoming a licensed contractor is a big deal, especially if you own your own business and have employees. Make sure you protect your assets by getting general liability (GL) insurance and workers’ compensation.

Why general liability coverage?

General liability insurance for contractors provides coverage against costs associated with third-party accidents, property damage, and bodily injury.

In the construction industry, you never know what can happen. A customer might trip over tools left lying on the ground, or you might damage a client’s furniture unintentionally during a home remodeling project.

And those costs can be substantial: in fact, it’s estimated that the average claim for property damage for small businesses is $30,000. Unless you carry GL insurance, that financial loss could come directly out of your own pocket.

Applying for a NM contractor’s license?

You may need to show proof of business insurance to get your license.

That’s where we come in. Compare free insurance quotes for policies as low as $25.95/month.*

Start Here >

Don’t forget workers’ compensation insurance.

New Mexico law requires workers compensation coverage for all employees engaged in construction activities.

Along with meeting New Mexico requirements, a workers comp policy can also make good sense for your contractor business. If you have any employees - even if they’re part-time or temporary - a workers comp policy protects you and your business if your employees get hurt, injured, or sick while working on the job.

Workers compensation insurance covers the costs of lost wages, medical bills, rehabilitation expenses, and even death benefits. Carrying workers compensation can provide much-needed security, as having this coverage in place prevents an employee from suing your business for workplace injuries.

2. Apply to take the license exam.

When you’re ready, search for an exam site and sign up for a test on the PSI website. To get your license, you’ll need to show records that you passed a business and law course, in addition to any trade-specific exams.

3. Submit your application.

Get a big folder and organize your paperwork. Then send your license application packet to:

PSI – New Mexico Construction Licensing Services
2820 Broadbent Pkwy NE, Suite E&F
Albuquerque, NM 87107
877-663-9267

And that’s it! You’ll hear back from the Construction Industries and Manufactured Housing Division (CID) next.

4. Start advertising your contractor’s license status.

Already have your license? Nice job! It takes effort to get through the licensing process. Promote your license number on your website, business cards, contracts, and other marketing materials. Remember, this is a huge selling point for homeowners.

If you have a good insurance plan, promote it too. You’ll give homeowners peace of mind, especially if you’re new to the business.

Do you still need a plan? Get a quote today so you can get covered. It’s never too late to protect your contractor business against the unexpected!

Don't forget you may need a New Mexico business license before getting started, but so check out our guide here!

Licensed to Build

Getting your New Mexico contractor license is a big step toward starting your contractor business. But, getting any business off the ground often comes with a lot of questions. And finding answers can often feel like a full-time job.

We work with many small business owners, so we get that. So along with providing you with business insurance, we’re also here to provide you with business answers. Need to know how to create a business plan? Wondering about incorporation or becoming an LLC? Looking for some of the coolest small business names?

You can find all that and more in our small business resource center, Simply U. Like a good contractor, it’s there whenever you need it.

* Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - December 2020 data of 10% of our total policies sold.

Emily Thompson

Written by

Emily Thompson

I earned a B.A. in Journalism from the University of Wisconsin at Madison (go Bucky). After realizing my first job might involve carrying a police scanner at 2 am in pursuit of “newsworthy” crimes, I decided I was better suited for freelance blogging and marketing writing. Since 2010, I’ve owned my freelance writing business, EST Creative. When I’m not penning, doodling ideas, or chatting with clients, you’ll find me hiking with my husband, baby boy, and 2 mischievous mutts.

This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer

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