Learn about business insurance requirements and the most common policies for general contractors in California.
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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.
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.
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.
California requires workers’ comp for general contracting businesses with employees. It also protects sole proprietors from work injury costs that health insurance might deny.
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.
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.
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.
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.
This policy covers structures in progress and materials, often paying for damage caused by fire, vandalization, and non-severe weather events.
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.
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:
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.
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 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:
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.
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.
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:
Hear from customers like you who purchased small business insurance.
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:
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.
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:
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.