Learn about business insurance requirements and the most common policies for general contractors in California.
Which policies are required for general contractors in California?
Depending on the specifics of your work, general contractors may be required to hold several different types of business insurance. For example, if your business owns a vehicle, you likely need to purchase commercial auto insurance to meet state requirements.
If you have a physical location with a commercial lease, your property manager may require you to purchase general liability insurance. Commonly purchased by general contractors in California, general liability insurance can protect your business from expenses associated with common mishaps, such as customer property damage and injuries.
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.
What are the most common policies for general contractors in California?
The most common policies for general contractors in California vary depending on revenue, client contracts, partnerships, and other factors.
General liability insurance
General liability insurance is the foundation of a general contractor’s protection. It covers damage to client property, as well as client injuries. Most commercial leases require you to have this coverage.
Bundle this policy with commercial property insurance in a business owner’s policy for savings. Adding umbrella liability insurance can boost your coverage on general liability insurance and other policies.
Commercial auto insurance
Commercial auto insurance protects vehicles owned by your general contracting company. It covers property damage and medical bills in an accident, along with vehicle theft, weather damage, and vandalism.
California workers' compensation
If you own a construction or home improvement business in California with one or more employees, your business is required to carry workers’ compensation insurance. Workers’ compensation can help pay for medical bills and lost wages when an employee is injured on the job.
Professional liability insurance
Professional liability insurance provides protection when a general contractor is sued for a professional mistake, such as missing a deadline on a construction project. This policy is also called errors and omissions insurance.
Builder’s risk insurance
Builder’s risk insurance can cover fires, vandalism, equipment theft, and other damage done to a structure still under construction.
What do general contractors in California pay for insurance?
According to an analysis of Insureon applications, the typical general contractor in California can expect to pay more than the national median for some types of business insurance, but less for other types.
For example, the median annual cost of commercial auto insurance for general contractors in California is $1,717, significantly less than the national median of $2,417. The median annual premium for a business owner’s policy is just $525, almost half the national median premium. However, general contractors in California can expect to pay more for general liability insurance and surety bonds.
Save time and money with Insureon
Insureon’s industry-leading technology helps general contractors in California save time and money shopping for insurance by comparing policies from top U.S. providers. Start a free online application to review quotes for the policies that best fit your business. 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 and types of employees
- Current and projected revenue
- Business partnerships
- Insurance history and prior claims
- Commercial lease insurance requirements
Apply for free insurance quotes for general contractors today.