Insurance Requirements for General Contractors in California

General contractors in California operate in one of the most regulated environments in the construction industry. Between CSLB licensing requirements, client-mandated insurance specifications, and contractual risk transfer provisions, getting your insurance program right is essential.

CSLB Licensing Requirements

The California Contractors State License Board requires:

• Workers Compensation Insurance (or exemption certificate if sole owner with no employees)
• $25,000 Contractor License Bond

These are minimum thresholds to maintain an active license. They do not represent what your clients, projects, or contracts will require.

What Private Commercial Clients Typically Require

Commercial clients — office building owners, retail landlords, industrial developers — typically require GCs to carry:

• General Liability: $1M–$2M per occurrence / $2M–$4M aggregate
• Workers Compensation: Statutory limits
• Commercial Auto: $1M CSL
• Umbrella / Excess Liability: $5M–$10M
• Builders Risk: May be required on project-specific basis
• Additional Insured endorsements — often with primary and non-contributory and completed operations requirements

What Public Works Projects Require

Government contracts (Caltrans, school districts, municipalities) add further requirements:

• Performance and Payment Bonds (often 100% of contract value)
• Specific insurance limits and endorsement language per contract specifications
• EMR below 1.0 for some public works contracts

Owner-Controlled vs. Contractor-Controlled Insurance Programs (OCIP/CCIP)

On very large projects, the project owner or GC may set up a wrap-up insurance program (OCIP or CCIP) that provides GL and Workers Comp for all contractors on the project. If you are enrolled in a wrap-up, your own policy must be coordinated to avoid duplicate coverage and premium.

Work With Capital & Co

Capital & Co specializes in contractor insurance and can structure a program that satisfies your CSLB requirements, your client contracts, and your bonding obligations. We work with GCs of all sizes throughout California.