If you are a contractor in California, protecting yourself and your business with the right insurance coverage is crucial. Contractor insurance offers financial protection for you under unspecific circumstances. Using the right insurance policy helps you to avoid potentially devastating financial losses that could threaten your business.

There are several options to choose from regarding contractor insurance in California. They include commercial auto insurance, general liability insurance, workers’ compensation insurance, and more. 

Each type of coverage offers particular benefits that can assist you in protecting your business from many risks, from legal alterations with the local California handymen up to high profile clients. Here’s a guide that will answer your questions about California general contractor insurance. 

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What is the Difference Between Bond and Insurance in Construction?

In the construction industry, bonds and insurance are critical forms of protection for contractors and project owners. However, contractors should understand the differences between these two forms of protection. 

 

Bonds: Contractual Obligations

A bond is a contract involving three parties: the surety, the contractor, and the project owner. The bond guarantees that the contractor will fulfill their contractual obligations. The surety will step in to cover the cost of damages or losses incurred by the project owner if the contractor fails to meet their obligations. Several types of bonds apply in construction, including:

• Bid bonds–Guarantee that the contractor will enter into a contract if their bid gains acceptance
• Performance bonds–Guarantee that the contractor will complete the project as specified in the contract
• Payment bonds–Guarantee that the contractor will pay all suppliers and subcontractors involved in the project

Insurance: Coverage for Losses

Insurance is a form of protection that covers losses or damages incurred by the policyholder. In the construction industry, contractors can purchase different insurance policies, such as:

• General liability insurance
• Professional liability insurance
• Workers’ compensation insurance

Key Differences

 

The project owner is the main beneficiary with bonds, as the bond ensures one will get compensation if the contractor does not complete the project. 

The policyholder is the main beneficiary with insurance since the policy covers damages or losses incurred by the contractor.

If the contractor fails to fulfill their bond obligations, the project owner must claim the bond. The policyholder must file a claim with the insurance company to get compensation for covered losses.

 

What Does a California Contractors Bond Cover?

California contractor’s bond covers the following:

 

Performance and Payment

A California contractor’s bond offers coverage for two main areas of risk: payment and performance. The bond ensures that the contractor will execute the project as contracted.

If the contractor fails, the bond will pay the project owner’s losses up to the bond maximum.

The bond guarantees the contractor will pay subcontractors and suppliers. If the contractor doesn’t pay, the bond covers unpaid costs up to its limit.

 

License and Permit Bonds

California contractors may require to obtain license and permit bonds. State and local governments require these bonds to ensure contractors comply with building codes, regulations, and other legal requirements.

A license bond guarantees that the contractor must comply with all regulations and laws related to their profession. The bond will cover the cost of damages or losses up to the bond’s limit if the contractor violates any laws or regulations.

A permit bond guarantees that the contractor must comply with all regulations and building codes related to the specific project. The bond will cover the cost of damages or losses up to the bond’s limit if the contractor fails to comply with these requirements.

 

Claims and Limits

The surety company that issued the bond will investigate the claim if a project owner or other party files a claim against a contractor’s bond. Suppose the claim is valid; the surety will pay the claim up to the bond’s limit. 

The contractor will reimburse the surety company for the amount paid. California’s minimum coverage for a contractor’s bond is $15,000. However, depending on the contractor’s license classification, the needed amount may be higher.

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What Insurance is Required for Contractors in California?

You may need insurance as an independent contractor in California, depending on your business. There are different independent contractor insurance requirements California. For situation-specific advice, consult a lawyer or insurance agent. Contractors in California should have various types of insurance to protect themselves, their employees, and their clients. Here are some of them:

 

Workers’ Compensation Insurance

Contractors in California should have workers’ compensation insurance to protect their employees in the event of work-related illnesses or injuries. This insurance covers lost wages, medical expenses, and other related expenses.

 

General Liability Insurance

General liability insurance is another requirement for California contractors. Workers’ comp insurance for independent contractors in California protects them from liability for damages or injuries caused to third parties, like clients or their property. 

 

Commercial Auto Insurance

Contractors should have commercial auto insurance if they operate vehicles for business purposes. The policy covers damages to the contractor’s vehicles and any injuries or damages caused to others by the contractor’s vehicles.

 

Professional Liability Insurance

Insurance is key for contractors who offer professional services, like engineers or architects. Such insurance protects the contractor from liability for omissions and operating errors.

 

 

Contractor General Liability Insurance In California: Are California Contractors Required To Have Liability Insurance? 

Yes, contractors in California should have liability insurance. General liability California contractor insurance protects contractors from contractual, general, and business tort responsibilities. Contractors must have minimum liability insurance from the California Contractors State License Board (CSLB) depending on their work type. 

General building contractors need $1 million in liability insurance, whereas specialty contractors need $500,000.

Before renewing or getting a contractor’s license, the CSLB requires liability insurance. Liability insurance is required for license suspension and fines.

In addition, California contractor insurance requirements are to obtain additional liability insurance to protect themselves from potential financial losses beyond the minimum requirements. Contractors need to review their insurance policies and ensure they have enough coverage for the work they perform carefully.

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California Contractor Insurance Cost 

California contractors pay $40 per month or $480 per year for a $1 million general liability policy. The cost of contractors liability insurance California varies depending on several factors. Here are the factors that affect contractor insurance cost:

• Type of insurance–Different types of insurance, like workers’ compensation and general or professional liability, have different costs. The cost of insurance will still depend on the amount of coverage required
• Size of business–The size of the business and the number of employees can also affect insurance costs. Larger businesses pay more for insurance than smaller ones
• Risk-level–The risk associated with the work performed can also impact the insurance cost. For example, a contractor who performs high-risk work, like roofing or electrical work, will likely pay more for insurance than a contractor who performs low-risk work, such as landscaping
• Insurance provider–Contractors need to shop around and compare provider quotes to find the best coverage and price

Acquire quotes from different providers to get the best value. Start by clicking the “Get Quotes’ button on this page. In connection, here’s a table showing the cost of a $1 million general liability insurance from companies we recommend:

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Best Contractor Insurance Companies in California

Many insurance companies in California offer contractor insurance. Choosing the best one can be challenging. Here are some of the top insurance companies contractors in California. Read some of the reviews below to know their pros, cons, and average rate for a $1 million general liability insurance: 

 

NEXT

Pros

• 10% discount for bundling other products
• Affordable starting price
• They give excellent customer service and support
• It has a simple online application process and offers immediate coverage for a quick transaction
• Best overall
• Fastest general liability insurance for California Contractors

Cons

• It may not be the best option if not bundling with other products.

NEXT offers industry-specific employer’s liability insurance with an affordable starting price. They also provide a discount for bundling with other insurance products. Their online platform offers quick and easy access to certificates, making it an excellent choice for small business owners.

Furthermore, they offer competitive rates and customizable coverage options to handle the precise needs of each contractor.

Best for: Best overall; Fastest general liability insurance for California contractors 

Average cost: $18 per month 

Our rating: 10/10

 

The Hartford 

Pros

• Wide range of coverage options, including workers’ compensation and commercial auto insurance
• Offers discounts for bundling policies and for policyholders with good loss histories
• 24/7 claims reporting hotline
• A+ rating from A.M. Best for financial strength
• Specializes in serving small businesses

Cons

• Agent might be required for the policy acquisition process if you have a poor risk profile

The Hartford is a popular contractor insurance los Angeles provider.Hartford provides customizable insurance plans to meet the specific needs of each contractor. Hartford is a financially stable company with a long-standing history. Self-employed workers comp California.

Best for: Experienced specialists

Average cost: $23 per month 

Our rating: 10/10

 

CoverWallet

Pros

• Simple and convenient website
• Multiple insurance partners for comparison shopping
• Offers general liability and other policies for small businesses
• Good customer service
• 30-day money-back guarantee

Cons

• No separate employers’ liability insurance option

If you are looking for California contractor insurance services, then CoverWallet is the way to go. They offer a user-friendly online platform for a quick and better user experience. CoverWallet’s insurance plans meet the unique needs of each contractor.

CoverWallet has a great selection of insurance partners and a streamlined quote process. CoverWallet provides general liability, professional liability, and workers’ compensation to contractors.

Best for: Comparing California contractor insurance quotes online 

Average cost: $26 per month 

Our rating: 10/10

 

Tivly

Pros

• A partner of many reputable insurance companies
• Covers customers with poor risk profiles
• Compare quotes over the phone

Cons

• You need to call to get a quote

Do you want to benefit from California contractor insurance services? Contact Tivly insurance company to get comprehensive contractor insurance policies, including workers’ compensation, liability, and commercial auto insurance.

They also offer 24/7 claims support. It offers workers comp insurance for independent contractors in California.  Their low cost and flexibility make them an excellent option for many small businesses. Call now to compare quotes over the phone. 

Best for: Comparing California contractor insurance quotes over the phone 

Average cost: $29 per month 

Our rating: 9/10

Thimble

Pros

• Quick and easy quote process
• Small business-specific options
• Offers policies for specific events or projects
• A-rated insurance partners for financial stability

Cons

• You can’t reach customer service by calling

Thimble is a well-respected insurance company. It offers contractor insurance policies for small and large businesses. They have a reputation for providing excellent claims support and customizable coverage options for self employed workers comp California. 

Thimble’s focus on small businesses makes it an excellent choice for entrepreneurs who need affordable and flexible coverage. This company’s contractors insurance for Los Angeles and other areas can be availed as a short-term general liability policy that lasts for hours, days, or weeks. 

Best for: Short-term general liability insurance for California contractors

Average cost: $33 per month 

Our rating: 10/10

 

Hiscox

Pros

• Online policy management tools
• 14-day refund policy
• A.M. Best A rated for financial stability
• Wide range of coverage options for small businesses
• Provides insurance for specific industries

Cons

• Some policy restrictions may apply

Hiscox offers general liability insurance California contractor with a $1 million-$2 million per occurrence and aggregate limit. . Some of them include general liability and commercial auto insurance.  They offer a 14-day refund policy and a small business-centered experience.Also, they also offer online tools for managing policies.

Best for: California contractor insurance with worldwide coverage

Average cost: $34 per month

Our rating: 10/10