Insurance in California

CSLB requires a $25,000 contractor bond as a condition of license issuance. This is a surety bond that protects consumers, not insurance that protects the contractor. It pays claims against the contractor up to the bond amount. Workers' compensation. California requires every contractor with employees to carry workers' comp. Sole proprietors without employees can file a CSLB Exemption from Workers' Compensation Insurance form. The moment a first employee is hired, the exemption is invalid and workers' comp must be in place from day one. Liability insurance. CSLB does not mandate a specific minimum for general liability, but two regulatory realities apply: - A CSLB-issued license is not marketable without liability insurance. Most general contractors will not hire a sub without proof of $1M per occurrence / $2M aggregate coverage. - Residential remodeling contracts over $500 require disclosing whether the contractor carries general liability and the policy amount. Signed contracts without the disclosure are a violation. Other coverages to carry: - Commercial auto for trucks used in the business. California personal auto policies carve out commercial use. - Hired and non-owned auto for employee personal vehicles used on company business. - Tools and equipment (inland marine). - Pollution liability for any refrigerant, fuel, or solvent handling work. - Employment practices liability (EPLI) when employee count reaches double digits. - Umbrella: $1M or $2M over the underlying GL is cheap insurance. Shop rates annually. California trade association programs (ABC, AGC, WECA, IEC, CalPASC) often run group rates that beat street.