California Contractor Insurance

The state of California is home to 3,622,304 small businesses, 281, 165 of which are in the construction field. In 2013, California’s economy grew at a slower rate than the United States, since its real gross state product increased by 2 percent compared to 2.2 percent for the United States gross domestic product. (Source: BEA). This means your business may need all the help it can get if you want it to succeed, and California contractor insurance is available to assist you in this endeavor. This coverage can protect your business and anyone you employ, and here’s how.

California Contractors General Liability

The purpose of general liability insurance is to pay for any injuries in case your customers are hurt on your property, since this coverage will pay their medical bills. General liability also pays for repairs when a customer’s personal property is damaged at your workplace. For instance, if someone damages his or her car in your parking lot, this coverage can pay for the repairs. Without this part of your California contractor insurance, you would have to pay for any medical bills or property damage repairs on your own, which could bankrupt your business.

Tools & Equipment Coverage

Tools are essential in the construction field, which means you need to protect them at all costs. You never know when they could be lost, stolen, or damaged, leaving you and your employees without a way to do the job. That’s where tools and equipment coverage comes in, since it pays to replace any items you need to complete your work as a contractor. Note that this coverage extends to both rented and purchased tools and equipment that you have to use in your line of work.

Employee Coverage (Workers Compensation)

Whether you have a few employees or several people working for you, your California contractor insurance needs to include workers compensation. Most states require this coverage because it pays the medical bills of any employees who are injured or sick due to the job. It also pays for their missed income, as well as any legal fees incurred if they bring a lawsuit against you after getting injured or ill due to work.

Business Vehicle Insurance

If you need to drive for business at any time in California, you need to add business vehicle insurance to your contractor policy. You cannot rely on your personal car insurance policy to pay for the damages when you cause a car accident while driving for business, so you need a separate policy as part of your California contractor insurance. You should ensure that your employees are also covered under your business vehicle insurance if they ever drive for you while on the job.


Having a surety bond can improve your appeal as a contractor, because it guarantees your services. What this means is that if you do not fulfill the requirements set out in your contract, you have to pay an agreed upon amount.

General Contractor Insurance Cost In California

General Contractor Insurance FAQ In California

We’re big believers in keeping things simple, so ask us anything and we’ll answer honestly and without the jargon.

What is general contractor insurance?

General contractor insurance is a broad term that refers to a range of coverage options designed to protect contractors from risks associated with their business operations, such as accidents, damages, and lawsuits.

What types of insurance coverage should general contractors consider?

General Liability Insurance: Protects against third-party claims for bodily injury, property damage, and more.
Workers’ Compensation: Required if you have employees. It covers employee injuries or illnesses resulting from work activities.
Commercial Auto Insurance: Covers vehicles used in the business.
License Bond: As mentioned, a requirement for licensing in California.

How much does general contractor insurance cost in California?

The cost can vary based on factors such as the size of the business, the number of employees, the types of projects you undertake, and your claims history.

How do I prove I have the required insurance?

Most insurance providers will give you a Certificate of Insurance (COI) that you can present to clients or other entities as proof of coverage.

What happens if I don't have the right insurance coverage?

Without proper insurance, you expose yourself to significant financial risk. If an incident occurs, you might have to pay out of pocket for damages, legal fees, medical bills, etc.

Is my equipment covered under general contractor insurance?

Not always. You might need "inland marine insurance" to cover tools and equipment, especially if they are transported between job sites.