California contractor insurance and bond requirements

Last reviewed Oct 11, 2026. General information from official state sources, not legal or insurance advice.

California contractors are licensed by the Contractors State License Board (CSLB). A license comes with a required bond and, for most contractors with employees, workers' compensation insurance. Liability insurance is a different story: most contractors don't legally have to carry it, but they must tell you whether they do. Here's what the rules are and how to check them.

The $25,000 license bond

Every licensed contractor must carry a $25,000 contractor license bond (Business and Professions Code §7071.6). The bond increased to $25,000 on January 1, 2023, under Senate Bill 607. A second $25,000 bond of qualifying individual is required when the license is qualified by a responsible managing employee, or by a responsible managing officer who owns less than 10% of the corporation (§7071.9).

The bond protects consumers and workers, but the CSLB itself warns that it "is often not enough to cover multiple complaints." Don't treat it as a substitute for checking the contractor carefully.

Workers' compensation

California law requires any employer with even one employee to carry workers' compensation insurance (Labor Code §3700). For contractors, the CSLB adds two rules (B&P §7125):

A contractor must keep a current workers' comp certificate on file with the CSLB, or file a statement that it has no employees (an "exemption").
Some trades can't use the exemption, even with no employees. That includes C-39 roofing, plus C-8 concrete, C-20 HVAC, C-22 asbestos abatement and D-49 tree service. Since 2013, the law has required the CSLB to remove the C-39 roofing classification from a license that doesn't have a workers' comp certificate on file.

A larger change is coming. A law passed in 2022 (SB 216) will require all contractors to carry workers' comp, but it has been delayed to January 1, 2028 (SB 1455, 2024). A 2025 law (SB 291) confirmed that date and increased penalties for filing false exemptions.

Liability insurance

For most contractors, commercial general liability insurance isn't required in California. The CSLB's consumer advice says it "is not required; however, it covers damage to your property." Two rules still apply:

Disclosure: home improvement contractors must give you a written notice saying whether or not they carry commercial general liability insurance. It must come with the bid, if there is one, and with the contract.
LLCs must carry it. A contractor licensed as a limited liability company needs liability insurance of at least $1 million for up to five people listed on the license, plus $100,000 for each additional person, up to $5 million (B&P §7071.19). LLCs also need a $100,000 bond that protects their workers' unpaid wages (§7071.6.5).

Because liability coverage is optional for many contractors, it's worth asking for proof before work starts on your home.

What a suspension means

The CSLB suspends a license when, for example, the bonding company cancels a required bond, a judgment or claim reduces the bond, or the workers' comp policy is cancelled or expires. A contractor may not contract for work with a suspended license, and the CSLB says work done during a suspension "is considered to be unlicensed."

In the CSLB's license data you may see short status codes such as "Work Comp Susp" or "Contr Bond Susp." They mean the license is suspended over workers' comp or the bond. Our California pages show the CSLB's status exactly as published.

Workers' comp on our California pages

California publishes the contractor's workers' compensation carrier and expiration date, not liability insurance. So the insurance shown on our California pages is workers' comp. Sole owners with no employees can be exempt, so "no policy on file" isn't automatically a red flag for every trade. But it is a problem for a roofer.

Why it matters to you

The CSLB puts the homeowner risk plainly: "If a worker is injured… and the contractor doesn't have insurance, you could be financially liable." It also warns that "seeing a license number doesn't necessarily mean the license is valid." Check the status, not just the number.

How to check a California contractor

Look up the license on the CSLB's Check a License tool, or call (800) 321-2752. Each license page shows the license status, bonding information and workers' compensation (the insurer, or an exemption statement).
Make sure the license classification fits the job: C-39 for roofing, B for general building, and so on.
For a roofer, confirm a workers' comp policy is on file, since roofers can't be exempt.
Ask for the liability insurance disclosure and a certificate of insurance, and confirm it with the insurer (see how to verify a certificate of insurance).

You can also look up any current California license, including its status, workers' comp policy and bond, on our California lookup, checked daily against the CSLB's public data.