What Insurance Do Contractors Need in California?

Insurance Requirements for California Contractors

Contractors in Mission Viejo and across California have to meet requirements from the Contractors State License Board (CSLB), and most general contractors, property managers, and public agencies add their own insurance requirements before they’ll award a job. Here’s what you need to know.

Workers’ compensation

California has been expanding its workers’ comp requirement for contractors. Under Senate Bill 216, starting January 1, 2026, all licensed contractors must carry workers’ compensation insurance, even if they have no employees. Before that, it was already required for certain classifications, such as roofing (C-39), concrete, HVAC, and tree service, and for any contractor with employees. If you don’t have a policy on file with the CSLB, your license can be suspended.

Contractor’s bond

Every active California contractor license requires a $25,000 contractor’s bond. Some license types, including LLCs and qualifying individuals, have additional bond requirements.

General liability insurance

General liability isn’t required for most license types, but it’s often required to get the work. GCs, commercial property owners, and public agencies usually ask for certificates of insurance with specific limits and additional insured endorsements. California requires home improvement contracts to tell the homeowner whether the contractor carries general liability. Contractors licensed as an LLC must carry liability insurance of at least $1 million, with higher amounts for larger companies.

Other coverage to consider

• Commercial auto for work trucks and vans, since personal auto policies often exclude business use
• Tools and equipment (inland marine) coverage for gear on job sites and in your truck
• Builder’s risk for projects under construction
• Umbrella coverage for higher contract limits

Contractors must keep the required insurance in place for the entire term of a contract. Not having insurance when it’s needed is like adding salt to a wound. Let us help you prepare for the inevitable. Contact us today for a no-obligation quote.