If you’re a contractor in California, you know how important it is to have the right insurance policies and licensing for your trade. Whether your focus is on projects that require engineering, carpentry, or other skills, the nature of your work determines the type of insurance you’re required to have.1

So if you need contractor insurance in California, you’re golden (state). We’ll teach you how to protect your business and your employees, what kind of policies are must-haves and good-to-haves, and how to get insured in minutes.

What are the insurance requirements for contractors in California?

To get licensed as a contractor in California, you’ll need to prove that you have the right insurance before taking on contract jobs.2

Here are the types of insurance that California contractors need to buy before they can legally work:

  • Workers’ compensation insurance: Unless you have a workers’ compensation insurance exemption, you’ll need to carry workers’ compensation insurance,3 which covers the costs associated with on-the-job injuries. Workers’ comp can cover medical expenses due to a doctor’s visit, medication, rehabilitation therapy, and lost wages after a worker becomes ill or injured at work.
  • General liability insurance: California requires contractors to have general liability insurance with an aggregate limit of $1 million for licensees with five or fewer people listed as personnel. However, if you have more than five people working with you, you’ll need to add $100,000 in limits per person.4 This insurance protects your business from the financial impact of claims of thirty-party bodily injury, property damage, or personal or advertising injury, and provides your legal defense.
  • Surety bond: If you’re a contractor with a Limited Liability Corporation (LLC) license, you’ll need a $100,000 surety bond, which is a sum of money that guarantees your performance and adherence to a rule set between you and a client or a state authority.
  • Contractor bond: The California Department of Consumer Affairs’ Contractors State License Board defines contractor bonds as a “bond required from all active licensees to cover consumers’ claims against the bond for the violation of state laws.”5 California requires contractors to have a $15,000 contractor bond in addition to the $100,000 surety bond.6

What are other types of insurance contractors need in California?

As a California contractor, some risks fall outside the scope of protection that workers’ comp and general liability insurance can provide. Here are other standard insurance policies that contractors in California should consider purchasing:

  • Professional liability insurance: Protects you if a client claims that your services caused them a financial loss or reputational damage. For example, say you’re building the interior of a brand-new retail store and you underestimate the time it will take to finish the project. If the store opening is delayed, causing the owner to lose out on business, you could be held liable. Even if the claim is frivolous, court fees are very costly.
  • Business Equipment Protection: Covers the equipment you own and use for work, especially if you take it around to job sites. If one of your saws breaks, for example, Business Equipment Protection could pay the cost of its replacement.
  • Commercial property insurance: Protects your business property, including your office space and the business contents inside or within 100 feet of your workplace. If a fire breaks out and damages your work computer, commercial property insurance can help you get back to work in no time. With Thimble, commercial property insurance is available with a Business Owners’ Policy (BOP) that also includes general liability insurance.

What does Contractor Insurance cost in California?

Several factors can determine the cost of your contractor general liability insurance in California, including your ZIP code, whether you hire subcontractors, the project size, and whether you work on building interiors or exteriors.

On average, general liability insurance for contractors costs $96.94 per month through Thimble.

Contractor licensing requirements in California

In addition to obtaining proper insurance, there are multiple other requirements you need to meet before you can work as a California contractor. To get licensed in California, contractors must provide:

  • Proof of work experience: In California, contractors must be 18 years old and have spent four of the past 10 years performing journey-level work.7
  • Proof of insurance: The state requires applicants to have the necessary surety and contractor bonds, as well as general liability and workers’ compensation.
  • A passing grade on your exam: California contractors must pass two computer-based exams, a law and a trade exam (unless they qualify for a waiver).
  • Registration with local and state agencies: You need to register with different California agencies depending on the kind of contract work you plan to do. For example, contractors who work with asbestos or other harmful chemicals must register with the asbestos contractors registration unit of the California Department of Industrial Relations’ Division of Occupational Safety and Health.8
  • Proof of an insurance contract: California requires contractors to provide a Certificate of Insurance (COI) to obtain a license. California contractors must provide a workers’ compensation insurance certificate on file with the California State License Board. A COI is a document that verifies to your vendors or clients that you have a valid, active insurance policy.

Get insured in the Golden State

Looking for contractor insurance in California? Eureka! We have the coverage you need to take on a gold rush of jobs.

Before you start working on your first project, make sure you’ve checked off all the items on your licensing to-do list. Getting insured should be at the top of that list.

To start, simply click “get a quote” or download the Thimble app, answer a few questions, and get a Contractor Insurance quote in minutes. Click to purchase and get your COI in your inbox and app right away. That’s faster than you can put a nail in drywall.

Get a quote

Sources:

  1. Contractors State Licensing Board. Get Licensed to Build. 
  2. California State Licensing Board. Forms and Applications. 
  3. Contractors State Licensing Board. Get Licensed to Build. 
  4. Contractors State Licensing Board. Get Licensed to Build. 
  5. The Department of Consumer Affairs Contractors State Licensing Board. CSLB Terms and Definitions. 
  6. Contractors State Licensing Board. Get Licensed to Build. 
  7. Contractors State Licensing Board. Get Licensed to Build. 
  8. Contractors State Licensing Board. Get Licensed to Build.