CA Contractor Insurance - Requirements and Coverage

October 7, 2022 / By: Stampede Insurance Team
CA Contractor Insurance - Requirements and Coverage

Every contractor company is different. Depending on the work that you do and the risks you face, your company will have different needs when it comes to contractors insurance in California. Whatever your needs, it is essential to have coverage that meets legal requirements. 

Here, we'll discuss the requirements and coverage needed to do business as a contractor in California. Having the right insurance coverage will put your company on the path to success, helping you build trust with clients and employees alike.

Insurance Requirements

There are a few insurance requirements for contractors in the state of California. These coverage requirements are designed to make things safer for contractors, workers, and clients. 

All contractors must have a $15,000 surety bond before they can receive their license. That bond guarantees that you will meet local standards for contractors. It proves to clients that you will abide by professional standards, both in terms of work and personal conduct. 

Californian companies with employees are required to have worker's compensation insurance. Even if you don't have any full-time employees on your payroll, you may want to consider this form of insurance if you hire subcontractors or part-time workers. Those people may be considered employees in the eyes of the law or insurance companies. 

Many contractors use vehicles as an essential part of their business. If you have a work vehicle, California law mandates that you purchase commercial auto insurance. Auto insurance in California is more affordable than the national average, at $1,717 on average. Nationally, the median is $2,417.

Business insurance requirements make the contracting industry safer and more regulated for companies and clients alike. Many businesses go beyond the minimum legal requirements and seek out other insurance options to ensure total, reliable coverage for every situation.

Types of Insurance for Contractors

Beyond the mandatory insurance coverage policies, there are many opportunities for contractors to increase their protection against litigation, damage, and other issues. 

General liability insurance isn't required by law in most places, but it's strongly recommended. It covers potential client property damage or bodily injury, two nightmare situations for most contractors. When you have coverage, you can rest assured that your insurance provider will cover repairs, medical bills, and any other approved claims.

For all contractors, equipment is one of their biggest investments. Equipment coverage will make sure you can replace your tools if they are damaged, stolen, or need repairs. if you have an office, you may need property insurance in case of any damage. 

Builder's risk insurance is essential for some contractors. If you construct buildings, this insurance policy will protect your building site and the building itself. During the construction process, buildings are vulnerable to vandalism and other types of damage. 

Most companies will choose to mix and match the many available policies. Not every contractor needs every type of coverage. 

Essential Coverage

When you are looking for a company to handle your essential insurance coverage, you need one that is responsive to your needs and able to help you compare various options. 

When choosing your coverage, you might want to think beyond requirements and consider additional ones that will benefit your company. That might include general liability insurance or equipment coverage. 

Our team will provide an insurance quote upon request. We require a few pieces of information about the size of your company and industry, but this quote will give you an idea of the monthly cost, so you can weigh the benefits versus the price.

Work with a Trustworthy Provider

Finding an experienced provider who understands the contractor business will make the rest of your business journey easier. Insurance policies provide immediate benefits for your company, but they can also help you establish your reputation as reliable and professional. Speak with an insurance agent who can help you compare contractors insurance policies and find the best solution for your needs. To reach out to our team, you may fill out our online form or contact us at 888-306-7887 at Stampede Insurance Services today!

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