California Contractor License & Insurance Requirements (Bond, WC, GL)

California contractor requirements come in three layers

Most guides blur three separate things together. Keeping them straight saves you from buying the wrong coverage, or assuming protection the state never required:

• Layer 1, the state (CSLB) license mandate: what you must file to get and keep a license.
• Layer 2, extra rules for LLCs: a second bond and a general liability mandate.
• Layer 3, contractual requirements: what general contractors, owners, and contracts demand on top.

Here is the point that trips up most contractors: California does not require general liability insurance for most contractors. To hold a license, CSLB requires a bond and workers’ comp (or an exemption). GL is a state requirement only for LLCs, and a contractual requirement for everyone else.

The $25,000 contractor license bond

Every active CSLB license must carry a $25,000 contractor’s bond (contractor bond), under Business and Professions Code §7071.6. It protects consumers, not you, if your work is defective or violates license law. The amount rose from $15,000 to $25,000 on January 1, 2023, under SB 607.

There is a second bond some licenses need. If your license is qualified by a Responsible Managing Employee (RME), or by a Responsible Managing Officer who owns less than 10% of the company, you also file a $25,000 Bond of Qualifying Individual (BPC §7071.9).

Workers’ comp: a certificate or a valid exemption

To issue or renew a license, CSLB requires either a Certificate of Workers’ Compensation Insurance or a valid exemption stating you have no employees (BPC §7125).

So a solo C-39 roofer with no crew still must carry workers’ comp. For a one-person operation, a ghost policy is one route brokers use to satisfy this without insuring a non-existent payroll. See our workers’ compensation options.

General liability: required by the state only of LLCs

This is where most advice goes wrong. California does not require general liability to hold a license for most contractors. The exception is LLCs.

An LLC licensee must carry commercial general liability of at least $1,000,000 aggregate for five or fewer members of record, plus $100,000 for each additional member, up to $5,000,000 (BPC §7071.19). An LLC also files a $100,000 worker bond (BPC §7071.6.5) on top of the $25,000 contractor bond.

Sole proprietors, partnerships, and corporations are not required by the state to carry GL to hold a license. That does not mean you can skip it: general contractors and owners almost always require it by contract, which is the next layer.

Do you even need a license?

For almost any construction work in California, yes. As of January 1, 2025 (AB 2622), unlicensed “minor work” is exempt only when the total price is under $1,000 and no building permit is required (BPC §7048), up from $500. Above that amount, or whenever a permit is required, a CSLB license is mandatory.

You license under a classification that matches your trade, most commonly: B General Building, A General Engineering, C-39 Roofing, C-10 Electrical, C-36 Plumbing, C-20 HVAC, and C-8 Concrete.

What general contractors and owners require on top

Meeting CSLB’s rules gets you licensed. Winning jobs is a second layer. General contractors and owners routinely require, by contract:

• Commercial general liability, commonly $1 million per occurrence / $2 million aggregate.
• An additional insured endorsement naming the GC or owner.
• A waiver of subrogation.
• Primary and noncontributory wording.
• A certificate of insurance as proof, before you start work.

These are contractual, not CSLB, requirements, but on a real job they are just as binding. We help California contractors line up the coverage a GC actually asks for so a certificate never holds up a start date.

Key takeaways

• To hold a California license, the state requires a $25,000 bond (BPC §7071.6) and workers’ comp or a valid exemption (BPC §7125).
• General liability is not a state requirement for most contractors: only LLCs must carry it (BPC §7071.19), plus a $100,000 worker bond.
• Five trades, including C-39 roofing, must carry workers’ comp even with no employees.
• You need a license for work over $1,000 or whenever a permit is required (AB 2622, effective 2025).
• General contractors add their own layer: GL at $1M/$2M, additional insured, waiver of subrogation, and a COI.

Frequently asked questions

Sources

• California Business & Professions Code §7071.6 (contractor bond, $25,000, operative Jan 1, 2023)
• BPC §7071.9 (Bond of Qualifying Individual)
• BPC §7071.6.5 (LLC $100,000 worker bond)
• BPC §7071.19 (LLC general liability, $1M aggregate to $5M)
• BPC §7125 (workers’ comp certificate or exemption) and CSLB Workers’ Compensation Requirements
• BPC §7048 as amended by AB 2622 ($1,000 unlicensed-work threshold, effective Jan 1, 2025)
• SB 607 (contractor bond raised $15,000 to $25,000)
• CSLB Bond Requirements and LLC pages (cslb.ca.gov)