California Carpenter Insurance

General liability insurance protects your carpentry business from the most common third-party lawsuits. Because carpenters often work around other people and on their properties, they face a high risk of accidental bodily injuries and property damage.

If your business is blamed for harming someone or damaging their property, this policy will cover medical payments and repair costs, along with legal expenses if the injured party sues. That includes attorney's fees, court costs, and a court-ordered judgment or settlement.

General liability insurance can also pay for lawsuits related to advertising injuries, such as libel, slander, and copyright infringement. For example, it will pay for your legal defense costs if a competitor sues your business for making a false statement about them on social media.

In California, carpentry businesses are often required to carry general liability coverage. For example, all limited liability companies (LLCs) that are licensed by the Contractors State License Board (CSLB) must carry at least $1 million in coverage. Sole proprietors and corporations holding a C-5 or C-6 license are not subject to the same state mandate, though clients and general contractors routinely require coverage regardless of business structure.

Any small business owner might find they need general liability to sign a commercial lease or apply for a business loan. To meet requirements for higher limits, you can add excess liability or commercial umbrella insurance to your general liability policy. Umbrella insurance boosts the limits of general liability insurance and other liability policies once the limit is reached on a claim.

All contractors who hire California employees must provide workers' comp coverage, even if your business is based out of another state. If you do not have any employees, then you will still need workers' comp to maintain your contractor's license starting in 2028 to comply with Senate Bill 216.

In California, carpenters and other contractors need a license to take on projects valued at more than $1,000, or projects that require permits or employees.

Workers' comp pays for medical bills and provides disability benefits during recovery if an employee is injured on the job. Most policies include employer's liability insurance, which covers lawsuits from injured employees.

Carpenters have a high rate of injuries, which is why you should consider buying workers' comp even if it's not required. If you're injured on the job, your workers' comp policy will pay for any medical treatment you need—including ongoing care—and help offset your lost wages.

Commercial auto insurance covers medical bills and property damage if your carpentry business's vehicle is involved in an accident. Depending on the coverage options you choose, it can also pay for vehicle theft, weather damage, and vandalism.

Minimum auto insurance requirements for California businesses are:

• $30,000 in bodily injury liability or death liability per person
• $60,000 in bodily injury liability or death liability to more than one person
• $15,000 in property damage per accident

For vehicles that your business uses but does not own, you'll need a separate policy called hired and non-owned auto insurance (HNOA). This policy provides liability coverage but it does not cover damage to the insured vehicle.

Personal auto insurance will typically not cover any driving for business purposes, which is why you may need supplemental coverage.

Contractor licenses and permits in California sometimes require a surety bond, depending on the type of work you do.

All contractors, including carpenters, must have a $25,000 surety bond in order to be licensed with the CSLB. You might also need a bond to work in a public right-of-way, bid on a project, or sign a contract with a client.

A surety bond guarantees financial reimbursement for the client if a carpenter fails to fulfill the terms of a contract or adhere to regulations. There are many different types of surety bonds, including bid bonds, performance bonds, and payment bonds.