How to become a general contractor

The right small business insurance is important for any general contractor. Some of these policies may be required by law, while others just make good business sense as they protect your bottom line.

• General liability insurance covers ordinary business risks, such as a customer’s slip and fall accident on your property, or damage to a customer’s property.
• A business owner's policy (BOP) combines general liability coverage and commercial property insurance, and it's typically less expensive than buying each policy separately.
• Workers' compensation insurance is required in most states for businesses with one or more employees, and for sole proprietors in some of the riskier professions within the building trades.
• Contractor’s tools and equipment insurance covers the repair or replacement of your tools and equipment if they’re lost, stolen, or damaged.
• Professional liability insurance covers your legal costs if an unsatisfied customer sues you over a mistake, such as a missed deadline or failing to follow building plans. It's also called errors and omissions insurance (E&O).
• Surety bonds act as a contract between a business, a client, and an insurance company. They guarantee the surety company will reimburse the client if the business fails to deliver contracted services. In the construction industry, these are also referred to as license bonds and contractor bonds.

With Insureon's free and easy online application and the guidance of insurance agents along the way, you can find the right contractor insurance at the most affordable price.

California requires both licensing and registration to work on projects worth more than $500.

There are four types of licenses available [PDF]:

• Class A General Engineering Contractor for projects requiring special engineering knowledge and skill.
• Class B General Building Contractor for projects involving two or more unrelated trades (not including framing and carpentry).
• Class B2 Residential Remodeling Contractor for projects involving existing residential wood frame structures, with nonstructural projects requiring at least three unrelated building trades.
• Class C Specialty Contractor for different types of construction involving specialized building trades, among 41 separate classifications.

Applicants must meet these licensing requirements in California:

• Have at least four years of experience, within your licensing classification, over the past 10 years.
• Pass a trade exam, business exam, and law exam.
• Complete a background check.
• Have proof of general liability insurance (via a certificate of insurance, or COI), plus a surety bond or cash deposit of $25,000.

Florida requires licensing and registration for general contractors.

There are two general types of licenses available:

• A certified license allows a contractor to work anywhere in the state.
• A registered license allows a contractor to work in certain areas.

There are also three different licensing classifications in Florida:

• Residential contractor: Can work on residences of no more than two stories tall.
• Building contractor: Construction, remodeling, or repair of residential and commercial buildings that are no more than three stories tall.
• General contractor: No restrictions. At least one year of experience in construction is required. Able to work on structures four stories or higher.

Applicants must meet these licensing requirements in Florida:

• At least four years of relevant work experience, or up to three years of education and a year of work experience.
• Pass a trade exam, business exam, and law exam.
• Provide a financial statement showing financial stability.
• Proof of general liability and workers’ compensation insurance.

Georgia requires both licensing and registration for most projects worth $2,500 or more.

There are four different licenses available for general contractors in Georgia:

• General contractor: For work on private, commercial, public, and other projects.
• General contractor-limited tier: Same as the basic contractor license, but with a cap on the contract amount and the individual's net worth.
• Residential-basic contractor: Limited to one- and two-family detached residential buildings, plus related structures no more than three stories tall.
• Residential-light commercial contractor: Same as residential-basic, plus multifamily and multi-use light commercial buildings and related structures.

Each Georgia license has its own specific requirements. Every tier requires general liability insurance, though the amount that's required varies. Workers' comp is also required for business with three or more employees. General contractors must also show proof of financial responsibility, or a surety bond.

The Construction Management Association of America offers two certifications.

A Certified Associate Construction Manager (CACM) designation indicates a construction manager has the ability to lead certain aspects of a construction project on their own, but not an entire project.

Applicants must provide references that verify their experience and pass a comprehensive exam. CACMs are also required to recertify every three years through professional development or retaking the exam.

The CACM designation requires 12 months of responsible in charge (RIC) experience, at least two references to verify this, plus a four-year degree in construction experience or the equivalent.

A Certified Construction Manager (CCM) is a higher level accreditation. People with this certification have the ability to provide managerial oversight of construction projects, from planning and design to completion, while making sure they finish on time and on budget.

The CCM designation requires one of the following combinations of education and experience:

• A four-year degree from an accredited school, plus four years of RIC experience as a construction manager.
• A two-year degree, plus four years general construction experience, and four years of RIC experience.
• Eight years of general construction experience and four years of RIC experience.

Applicants must take an in-person exam, provide at least two references, and recertify every three years through continuing education or retaking the exam.

A CAPM designation from the Project Management Institute isn’t strictly related to the construction industry, but many construction managers pursue this certification.

A CAPM certification indicates someone has managerial, project management, and leadership skills. Before passing a written test, applicants must meet the following requirements:

• A four-year degree, three years of experience leading projects, and 35 hours of project management education.
• A high school diploma or associate's degree, plus five years of experience leading projects, and 35 hours of project management education.

Maintaining this certification requires time spent in continuing education classes, volunteering, or teaching.

Trade shows and industry events offer a chance to learn more about your field, make connections, and build your network. There are many industry events throughout the year:

• World of Concrete offers a chance to learn about new trends and techniques in concrete and masonry, with 1,500 exhibits.
• Advancing Prefabrication focuses on prefabrication, modularization, and new manufacturing methods.
• The International Builders' Show is organized by the National Association of Home Builders. It offers seminars, workshops, and exhibits on new products, technologies, and business strategies with more than 1,400 exhibits and 100 seminars.
• ConExpo/Con AGG calls itself the largest construction trade show in North America. It features 1,800 exhibitors and 2.7 million square feet of exhibit space. Learn about the newest trends in construction equipment and technologies while checking out the latest construction equipment from top manufacturers.
• ENR Future Tech focuses on the newest advances in construction technology, with interactive sessions by industry leaders.
• Greenbuild International Conference and Expo offers sessions on best practices for creating environmentally-friendly communities and workplaces.
• The National Electrical Contractors Association (NECA) Convention and Trade Show, hosted by the National Electrical Contractors Association, focuses on new electrical products and technologies.
• Women in Construction is a one-day event for promoting career opportunities for women in construction and how to build a welcoming culture. Sessions include discussions on mentorship, collaboration, and bias within the industry.
• Ariat Dirt World Summit features top experts within the industry discussing its toughest challenges, such as organizational leadership and retaining talent.
• The Construction Financial Management Conference (CMFC) focuses on the financial side of construction, covering topics such as contract compliance, taxes, and financial fraud. It’s jointly sponsored by the Associated General Contractors of America and the Construction Financial Management Association (CFMA).

Your local chamber of commerce and other business groups can be a valuable resource for making connections in your area.

Joining industry trade groups and associations can help you make contacts within the construction industry itself. These include:

• Associated General Contractors (AGC): Calls itself “the voice of the construction industry.” It’s an organization of construction contractors and industry-related companies.
• Associated Builders & Contractors (ABC): A construction industry trade association based on the merit shop philosophy, helping its members develop people, win work, and deliver it safely, ethically, and profitably. 
• American Institute of Constructors (AIC): Promotes individual professionalism and excellence throughout the related fields of construction.
• American Subcontractors Association (ASA): Promotes the rights and interests of subcontractors, specialty contractors, and suppliers.
• Construction Management Association of America (CMAA): An industry association dedicated to the practice of professional construction management. Its members include private sector and government owners within the industry, plus construction consultants, technology suppliers, academia, and legal organizations.
• National Institute of Building Sciences (NIBS): Supports advances in building science and technology, while serving as an interface between government and the private sector.
• Project Management Institute (PMI): Calls itself the leading authority in project management. It’s committed to advancing the project management profession through knowledge sharing and best-in-class certifications.