What Insurance Do Contractors Need?

Insurance Requirements for Contractors

Contractors and vendors who want construction contracts, service agreements, or maintenance work are almost always required to carry specific insurance and keep it in force for the entire contract. Project owners, general contractors, and property managers will usually ask for a certificate of insurance before you start.

Coverage most contractors need

• General liability: covers injuries and property damage your work causes to others. Most contracts ask for at least $1 million per occurrence, often with additional insured and waiver of subrogation endorsements.
• Workers’ compensation: required in California for any contractor with employees. The Contractors State License Board (CSLB) requires a certificate of workers’ comp or a valid exemption on file, and some license classifications must carry it regardless.
• Commercial auto: covers work trucks and vans. Personal auto policies usually exclude business use.
• Tools and equipment (inland marine): covers tools and equipment on the job, in transit, or in storage.
• Umbrella: adds extra liability limits when a contract calls for more than your primary policies provide.

California license requirements

California contractors must post a $25,000 contractor’s license bond with the CSLB. Contractors licensed as LLCs must also carry liability insurance of at least $1 million for five or fewer employees, plus $100,000 for each additional employee, up to $5 million.

Not having insurance when it’s needed is like adding salt to a wound. Let us help you be prepared for the unexpected. Contact us today for a no-obligation quote.