California contractor insurance quote: license requirements, liability and workers' comp

If you need a contractor insurance quote in California, start with what the Contractors State License Board (CSLB) requires to issue and keep your license: a $25,000 contractor bond, workers' compensation proof or an exemption, and for LLCs, liability insurance and an extra bond. BIG can quote the liability, workers' comp and bonds together so your license filings and job certificates line up.

Do I need a California contractor license?

CSLB licenses contractors in California. Its minor work bulletin says that starting January 1, 2025, the license exemption for small jobs rose from $500 to $1,000. The exemption does not apply if the work needs a permit or if you hire anyone for the project. Most contractors working in Los Angeles, San Diego, the Bay Area, Sacramento or the Central Valley will need a license.

CSLB's license classifications include A General Engineering, B General Building, B-2 Residential Remodeling and the C specialty classes, such as C-10 Electrical, C-20 HVAC, C-33 Painting, C-36 Plumbing and C-39 Roofing. Your class matters for insurance too, because carriers rate liability and workers' comp by the work you actually do.

What bond does CSLB require?

CSLB's bond requirements page says a $25,000 contractor bond must be in place before CSLB can issue an active license, and it applies at reactivation and renewal. A separate $25,000 Bond of Qualifying Individual applies when a Responsible Managing Employee qualifies the license, or a Responsible Managing Officer who owns less than 10% of the voting stock.

The bond amount is not the premium. A surety prices the bond based on the owners' credit and history.

What extra rules apply to an LLC contractor?

CSLB's LLC page says LLC licensees need:

• Liability insurance with a cumulative limit of at least $1 million when five or fewer people are listed as personnel of record, plus $100,000 for each additional person, up to $5 million.
• An additional $100,000 employee/worker bond for workers harmed by unpaid wages or fringe benefits.
• Coverage written by an insurer licensed in California or an eligible surplus line insurer.

Corporations and sole owners do not face that state liability minimum, but most general contractors and project owners will ask for liability limits anyway.

Who must carry workers' comp in California?

CSLB's workers' compensation page says employers must carry workers' comp even with one employee. To get or keep an active license, you file either a Certificate of Workers' Compensation Insurance, a Certification of Self-Insurance, or an exemption certifying you have no employees. If you hire later, CSLB needs proof of coverage within 90 days.

Some classes cannot use the exemption. CSLB lists C-8 Concrete, C-20 HVAC, C-22 Asbestos Abatement, C-39 Roofing and C-61/D-49 Tree Service. These contractors must carry workers' comp whether or not they have employees. A license qualified by a Responsible Managing Employee cannot file the exemption either.

Coverage must be continuous. CSLB suspends the license if it lapses, and work done during the suspension is treated as unlicensed. CSLB's Winter 2025 newsletter also says mandatory workers' comp for all contractors, first set for 2026, now takes effect in 2028.

What do general contractors and project owners ask for?

Before you start a job, expect requests for:

• A certificate of insurance showing general liability and workers' comp.
• Additional insured status for the general contractor or owner, often on ongoing and completed operations.
• Waiver of subrogation on workers' comp and liability.
• Commercial auto for trucks and trailers, and inland marine for tools and equipment.

Wildfire rebuilding, seismic retrofits and hillside work bring their own contract terms, so send us the insurance section of the contract before you sign.

What BIG needs to quote your California contracting business

1. Legal name, entity type and CSLB license number or pending application.
2. License classes and a short description of your work.
3. Annual revenue, payroll by job type and subcontractor costs.
4. Residential, commercial or public work mix, and the counties you work in.
5. Current certificates, contract insurance requirements and loss history.
6. Vehicles, equipment values and any bond needs.

Questions California contractors ask us

Can I get my license without workers' comp? Yes, if you have no employees and your class is not one CSLB excludes. Roofers, HVAC, concrete, asbestos and tree service contractors cannot use the exemption.

What happens if my workers' comp policy cancels? CSLB suspends the license until it receives proof of new coverage. Keep the policy continuous.

Does an LLC need more insurance than a corporation? CSLB requires LLC licensees to carry at least $1 million in liability insurance and a $100,000 worker bond on top of the $25,000 contractor bond.

Can BIG quote my bonds and insurance at the same time? Yes. Send your license details and contract requirements, and we will review the bond, liability and workers' comp together.

Get your California contractor quote

Request a contractor insurance quote, or call 612-712-6407.