California Contractor General Liability Insurance

Top Reasons Smart Contractors Carry General Liability

• Clients ask for it. Many general contractors, property managers and HOAs require a certificate of insurance before you start work.
• It protects you from claims. It helps cover bodily injury and property damage claims from your work, plus legal defense costs.
• LLC licenses require it. The CSLB requires contractors licensed as an LLC to carry liability insurance.
• You look more professional. Showing proof of coverage can help you compete for bids and bigger jobs.
• It protects what you've built. A covered claim is paid by the policy, not out of your business's bank account.

What general liability covers for California contractors

General liability protects your business when someone outside your company says your work or your crew caused them harm. Typical claims include a homeowner tripping over materials, water damage to a client's floors after a plumbing job, or a neighbor's fence damaged during demolition. A policy generally helps pay for covered bodily injury and property damage, plus the legal defense costs if you are sued.

It also covers completed operations, meaning claims that come up after the job is finished, which matters for contractors whose work can cause problems months or years later. Most policies include personal and advertising injury coverage too.

Common gaps and exclusions to check before you buy

Most California contractors don't find out what's missing until a claim is denied. Before you buy, look for these:

• Classification limits. If the work you actually do isn't listed on your policy, a claim from that work may not be covered.
• Residential, tract or new-construction exclusions. Some policies exclude whole categories of work.
• Subcontractor requirements. Many policies require your subs to carry their own insurance and may not respond if they don't.
• Additional insured and waiver wording. Your GC's contract may require specific endorsements your policy doesn't include.
• Your own work, tools and injuries. General liability doesn't fix faulty workmanship, replace equipment or cover your own injuries. Workers' comp covers employee injuries.

Why compare multiple carriers

Carriers differ in which trades they accept, what they exclude and which endorsements they offer. A policy that looks similar on the surface can respond very differently to a claim. I start with ContractorGL and compare it with other carriers' options, then walk you through the differences in plain English so you can choose with your contracts in front of you.

Need workers' comp too? See our workers' compensation quote page, learn about ghost policies for California contractors with no employees, or read the California Workers' Comp & Ghost Policy Guide.

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California Construction Insurance Specialist

Helping contractors start, manage and grow a successful construction business

You deserve more than a policy. You deserve a partner who gets you the certificate of insurance you need, with clear next steps. For 15+ years I've helped residential contractors with their insurance options. Watch ContractorTV on YouTube and listen to the California Contractor Podcast on Spotify — I share how to build a stronger construction business.

• Member & Insurance Advisor, California Building Industry Association (CBIA)
• Member & Insurance Advisor, National Association of the Remodeling Industry (NARI)

Frequently Asked Questions (FAQ)

1. What does general liability insurance cover for contractors?

General liability covers claims that your work or your operations caused bodily injury or property damage to someone else, such as a client, a neighbor or the public. It usually also covers the legal defense costs of those claims. It does not cover your own injuries, your tools, or the cost of redoing faulty work.

2. Do California contractors need general liability insurance?

It depends on how your license is set up. The Contractors State License Board (CSLB) requires contractors licensed as a limited liability company (LLC) to carry liability insurance, with at least $1 million in coverage for an LLC with five or fewer personnel of record, plus $100,000 for each additional person, up to $5 million. For other license types, general liability isn't required by the CSLB, but it's strongly recommended, and many general contractors, property managers and HOAs ask for proof of it before you start. Source: CSLB, Licenses for LLCs.

3. What is a certificate of insurance?

A certificate of insurance is a one-page summary showing that you have a policy in force, with the carrier, limits and policy dates. Clients often ask to be listed as the certificate holder or as an additional insured. Once your policy starts, you can get your certificate the same day.

4. What is an additional insured endorsement?

An additional insured endorsement extends some of your policy's protection to another party, often the general contractor or property owner on a job. Many contracts require it, and they may require specific wording. Check your contract and send it to me before your policy starts so the policy matches.

5. What does general liability usually not cover?

Common exclusions include your own injuries, injuries to employees (that's workers' comp), damage to your own tools and equipment, and the cost to fix your own faulty work. Many policies also limit or exclude certain types of work, such as residential work, or certain claims, such as mold. Read the exclusions before you buy, not after a claim.

6. Is ContractorGL an insurance company?

No. ContractorGL is The Contractors Resource Center's general liability program name, not an insurance carrier. We compare multiple carriers' options so you can see what fits your trade and the jobs you take.

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