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General contractor insurance in California
Learn about business insurance requirements and the most common policies for general contractors in California.
Find the right coverage
Insureon helps general contractors find construction insurance that matches your unique risks.
Get free expert advice and peace of mind knowing you have the right property and liability coverage for your small business.
What are the most common policies for general contractors in California?
General contractors may need different types of insurance depending on the work they do. These are the most popular insurance policies for California general contractors to protect against financial losses.
General liability insurance
A general liability policy covers basic risks, such as a client who is injured on your jobsite. Bundle it with commercial property insurance for savings in a business owner's policy.
BEST FOR
- Customer bodily injuries
- Damaged customer property
- Advertising injuries
Business owner's policy
A BOP bundles general liability coverage and commercial property coverage at a discount. It's often the most cost-effective type of insurance for general contractors.
BEST FOR
- Accidents that injure clients
- Client property damage
- Stolen or damaged business property
Workers’ compensation insurance
California requires workers’ comp for general contracting businesses with employees. It also protects sole proprietors from work injury costs that health insurance might deny.
BEST FOR
- Employee medical expenses
- Disability benefits
- Employee injury lawsuits
Commercial auto insurance
This policy covers the cost of injuries and property damage in accidents involving a general contractor’s vehicle. It can also pay for repairs to vehicles damaged by weather or vandalism.
BEST FOR
- Legal costs from an auto accident
- Property damage caused by your vehicle
- Vehicle theft and vandalism
Contractor's tools and equipment insurance
This policy helps pay for repair or replacement of a contractor’s saws, nail guns, hammers, and other tools if they're lost, stolen, or damaged.
BEST FOR
- Equipment less than five years old
- Mobile equipment and tools
- Small tools
Professional liability insurance
This policy is also called errors and omissions insurance (E&O). It covers legal fees when a general contractor is sued over a mistake, such as using the wrong materials.
BEST FOR
- Accusations of negligence
- Failure to complete a project
- Work mistakes and oversights
Contractor surety bonds
A bond guarantees reimbursement for the client if a contractor fails to fulfill the terms of a contract or adhere to building codes. Common bonds include bid, performance, and payment bonds.
BEST FOR
- Compliance with laws
- Incomplete jobs
- Breach of contract
Builder's risk insurance
This policy covers structures in progress and materials, often paying for damage caused by fire, vandalization, and non-severe weather events.
BEST FOR
- New construction
- Building renovation
- Worksite theft and vandalism
Contractors pollution liability insurance
Contractors pollution liability covers costs related to pollution, such as a lawsuit alleging harm caused from exposure to silica dust on a construction job site.
BEST FOR
- Pollution events
- Spills during transport
- Lawsuits over contaminants
Looking for different coverage? See more policies.
Are California contractors required to have insurance?
Whether you're in Los Angeles, San Jose, San Diego, or elsewhere in the state, general contractors in California must carry the following insurance coverage to comply with county or state laws:
General liability insurance
All general contractors in California are required to carry a surety bond and general liability insurance, which protects your business from expenses associated with common mishaps, such as customer injuries and property damage.
Most commercial leases also require businesses to carry this coverage. Adding commercial umbrella insurance can boost your coverage on general liability insurance and other policies.
Contractor general liability insurance can also help protect against advertising injuries, such as libel, slander, and copyright infringement. So, for example, if an unhappy customer writes negative and untrue reviews online, you can have the legal recourse to fight the allegations and protect your reputation.
How much is general liability insurance for contractors in California?
On average, Insureon general contractor customers based in California pay $144 per month for general liability coverage. Your exact cost may be higher or lower depending on many factors, such as your business revenue and the types of construction projects you complete.
Workers' compensation insurance
To meet state requirements in California, general contractors with employees must provide workers’ compensation insurance, which covers lost wages and medical bills for work injuries. This includes companies that are headquartered in other states but operate in California.
Some independent contractors and sole proprietors, such as roofers, tree service technicians, and HVAC contractors, must carry workers' comp in California even if they do not have any employees.
Commercial auto insurance
Commercial auto insurance protects vehicles owned by your general contracting company. It covers property damage and medical bills resulting from an accident, along with vehicle theft, weather damage, and vandalism.
Minimum auto liability requirements for California businesses are:
- $15,000 in bodily injury liability or death liability per person
- $30,000 in bodily injury liability or death liability to more than one person
- $5,000 in property damage per accident
You may want to consider additional coverage, depending on the kind of work you do and the vehicles you own.
For automobiles that are used for the business but are leased, rented, or otherwise not owned by the company, you'll need a separate policy called a hired and non-owned (HNOA) policy. Personal auto insurance will typically not cover accidents or incidents that occur during work-related activities.
Surety bonds
Licensure requirements in California sometimes include a surety bond, depending on the type of work you do.
A surety bond guarantees reimbursement for the client if a general contractor fails to fulfill the terms of a contract or adhere to building codes. Common types of surety bonds include bid bonds, performance bonds, and payment bonds.
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How much does insurance cost for general contractors in California?
General contractors in California who buy policies from Insureon pay an average of:
General liability: $144 per month
Workers' compensation: $590 per month
Commercial auto: $270 per month
Several factors affect the cost of general contractor insurance, including:
- Type of building construction, such as townhouses, multifamily homes, or offices
- Business property and equipment
- Business income and size
- Previous liability claims
- Years of experience in the construction industry
- Policy limits and deductibles
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When do you need a general contractor business license in California?
California general contractors are required to carry a license and registration if they are working on projects that are worth more than $450, according to the Contractors State Licensing Board (CSLB).
There are four types of licenses to meet different contractor needs:
- Class A General Engineering Contractor for projects that require a special engineering skillset
- Class B General Building Contractor for projects with more than one trade being utilized
- Class B2 residential Remodeling Contractor for projects on buildings with pre-existing wood frame structures that require three or more building trades
- Class C Specialty Contractor for projects that require a variety of building trades
To obtain a license, California contractors must complete a background check, carry general liability insurance and a contractor license bond or cash deposit of $25,000, pass a trade exam, and have at least four years of experience in their selected trade within the last ten years.
Failing to obtain the necessary license and proof of insurance before performing work in California could result in fines, misdemeanor charges, and even jail time.
How do I get California contractors insurance?
Insureon helps general contractors in California save time and money shopping for liability insurance policies by comparing coverage from top U.S. insurance companies.
Our insurance agents are licensed in California and can answer your questions as you consider coverage.
To make the application go quicker, have this information ready:
- Workforce details, such as the number of employees and subcontractors
- Current and projected revenue
- Business partnerships
- Desired coverage limits
- Claims history
- Commercial lease insurance requirements
Apply for free insurance quotes for general contractors today. We can work with you to identify and purchase the best types of coverage for your business. Most small business owners receive a certificate of insurance the same day.