Short answer: To keep a California contractor license you need a $25,000 contractor's bond on file with the CSLB. You also need a workers' comp certificate, or an exemption if you truly have no employees. Roofing (C-39), concrete (C-8), HVAC (C-20), asbestos abatement (C-22) and tree service (D-49) licensees can't use that exemption. LLC licensees must also carry liability insurance of at least $1,000,000. Clients often require general liability even when the law doesn't.
Requirements at a glance
| Requirement | Who | Amount or rule | Source |
|---|---|---|---|
| Contractor's bond | All licensees | $25,000 | B&P Code §7071.6 |
| Workers' comp certificate (or self-insurance) | Licensees with employees, and all C-8, C-20, C-22, C-39 and D-49 licensees | Must be on file at all times | B&P Code §7125 |
| Workers' comp exemption | Licensees with no employees (not the classes above) | Statement filed with the CSLB | B&P Code §7125(b) |
| Liability insurance | LLC licensees | $1,000,000 aggregate for 5 or fewer on the personnel of record, plus $100,000 per added person, up to $5,000,000 | B&P Code §7071.19 |
| Workers' comp for any employer | Every California employer | Insure or self-insure | Labor Code §3700 |
What the law doesn't cover but your contracts will
- General liability for property damage and injuries to others. Many general contractors require you to name them as additional insured.
- Commercial auto for work trucks. Personal auto policies often exclude business use.
- Tools and equipment coverage. See tools and equipment insurance for contractors.
What happens if your bond gets a claim
The surety may pay a valid claim, but you generally have to repay it. Read what happens after a contractor license bond claim.
More in our contractor insurance page.
Frequently asked questions
Does a California contractor need general liability insurance?
State law doesn't require general liability for most licensees, but LLC licensees must carry liability insurance under B&P Code §7071.19, and many clients, general contractors and permits require it in contracts.
Can I skip workers' comp if I have no employees?
Usually you can file an exemption with the CSLB under B&P Code §7125(b). That exemption isn't available to C-8 concrete, C-20 HVAC, C-22 asbestos abatement, C-39 roofing or D-49 tree service licensees, who must carry workers' comp or self-insure.
Is the $25,000 contractor bond insurance for me?
No. The bond protects consumers and others who are harmed by violations of contractor law. If the surety pays a claim, you generally must pay the surety back.
How much liability insurance does a California contractor LLC need?
At least $1,000,000 aggregate with five or fewer people on the personnel of record, plus $100,000 per additional person, up to $5,000,000 (B&P Code §7071.19).
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. Not legal, tax or financial advice, and not a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.
Related guide: Insurance for California contractors and tradespeople