5 Best General Contractor Insurance in California for 2023 

Thang Truong
Thang Truong
Updated on:

As a general contractor in California, it is essential to have the right insurance coverage to protect your business from financial losses. Whether you’re a small or large contractor, you need to make sure you have the necessary insurance to cover your business. In this article, we will be discussing the three best general contractor insurance companies in California and what they offer. We will also be discussing the requirements for general contractors to be licensed, bonded, and insured in California, as well as the cost of insurance and how to find cheap coverage. Whether you’re a new contractor or have been in the business for a while, this guide will provide valuable information to help you find the best insurance for your business.

5 best general contractor insurance companies in California

Many insurance companies offer coverage for general contractors. After internsive research, we recommend the following 5 providers for your consideration:

  • Simply Business: Best for finding cheap general contractor insurance
  • CoverWallet: Best for comparing several quotes from top-tier carriers 
  • NEXT: Best for affordable liability coverage for general contractors 
  • Smart Financial: Best for experienced agents
  • InsurePro: Best for cheap short-term general contractor coverage

Simply Business: Best for finding cheap general contractor insurance 

Simply Business is an online insurance broker that specializes in providing insurance for small businesses, including general contractors. They offer a variety of coverage options at competitive prices, making them a great choice for those looking for cheap coverage. 

Pros: 

  • Easily compare quotes from multiple insurers, a user-friendly website, and quick and easy online application process. 
  • All coverages that general contractors may need are available with Simply Business
  • Partner with 30+ reputable carriers, giving general contractors enough options to choose from 
  • Good customer satisfaction rating on trustpilot 

Cons: 

  • If you prefer a particular carrier that Simply Business doesn’t partner with, you need to look elsewhere 
  • It may take a bit longer than going directly to a carrier of your choice since Simply Busines has to pull quotes from several carriers to find the cheapest one.

CoverWallet: Best for comparing several quotes from top-tier carriers 

CoverWallet is another online insurance broker that allows customers to easily compare quotes from multiple insurers. They offer a variety of coverage options, including liability, workers’ compensation, and commercial auto insurance. CoverWallet has built a great quote comparison experience, making it easy for general contractors to compare quotes online

Pros: 

  • Able to easily compare multiple quotes, a user-friendly website, and quick and easy online application process
  • Partner with top-tier carriers 
  • Comprehensive digital capabilities from getting quotes, buying policies, and managing policies completely online 

Cons: 

  • Online quotes may not be available for some coverage. Sometimes you have to call to discuss quote options 
  • CoverWallet doesn’t handle claims. You have to file a claim directly with the carrier 

NEXT: Best for affordable general liability coverage for general contractors 

NEXT is a specialty insurance provider that focuses on providing affordable liability coverage for small businesses, including general contractors. They offer a variety of coverage options at competitive prices, making them a great choice for those looking for affordable and comprehensive coverage. 

NEXT is a digital-first carrier, they offer one of the best digital experiences. You can get quotes, purchase a policy, and manage the policy completely online with a few minutes. 

Pros: 

  • Comprehensive liability coverage for general contractors 
  • Affordable and competitive rates 
  • Great digital experience, from getting quotes, buying policies, or filing a claims 
  • Download certificate of insurance within minutes after purchasing 

Cons: 

  • Limited coverage options. Other coverages that general contractors may need may not be available with NEXT 
  • Lack of personalized services through agents 

Smart Financial: Best for their experienced agents 

Smart Financial is a brokerage firm that specializes in providing insurance for small businesses, including general contractors. They work with experienced agents to help customers find the right coverage at an affordable price. 

Smart Financial believes that an experienced agent can help general contractors understand the coverages they may need and find the right coverage at the most reasonable rate. 

Pros: 

  • A wide network with experienced agents who have worked with thousands of general contractors 
  • Offer a wide range of coverages that general contractors may need, making it easy to buy everything in one place
  • Partner with 30+ carriers, making it easy to find the right coverage at the reasonable rates 

Cons: 

  • Limited digital capabilities 
  • You have to work with an agent on phone. If you prefer doing everything online, this may not be a good option for you. 

InsurePro: Best for cheap short-term general contractor coverage

InsurePro is an online insurance broker that specializes in providing short-term coverage options for small businesses, including general contractors. You can choose to buy coverage for a few days or a few weeks. 

They offer a variety of coverage options at competitive prices, making them a great choice for those looking for cheap, short-term coverage. If you don’t need a traditional annual policy, InsurePro can help you save a lot of money. 

Pros: 

  • Quick and easy online application process 
  • Very affordable rates for short-term coverage 
  • Coverage is from reputable carrier partners 

Cons: 

  • A relatively new brokerage firm, lack of a historical track record 
  • Other complicated coverages that general contractors may need may not be available yet 

Are general contractors required to be licensed in California?

Yes, general contractors in California are required to be licensed by the California Contractors State License Board (CSLB). The CSLB is responsible for issuing and enforcing licenses for contractors in the state. To obtain a license, contractors must pass a written exam, demonstrate financial stability, and have a minimum amount of experience in the construction industry. Additionally, licensed contractors must carry workers’ compensation insurance and liability insurance.

Are general contractors required to have insurance in California?

Yes, general contractors in California are required to have liability insurance and workers’ compensation insurance. Liability insurance protects your business from financial loss in the event of a lawsuit, while workers’ compensation insurance covers medical expenses and lost wages for employees who are injured on the job. The specific insurance requirements for general contractors in California depend on the size of the business and the type of work performed.

What insurance coverage general contractors in California must have:

General contractors in California must have certain insurance coverage to protect their businesses from financial losses. Below are some of the most common types of insurance coverage that general contractors must have in California, along with a brief explanation of what they cover.

General liability insurance

General liability insurance is the most basic type of insurance that general contractors must have in California. It covers losses caused by third-party property damage, bodily injury, and personal injury that may occur during the course of the work. This coverage is designed to protect the contractor from financial losses if a client or other third party sues for damages.

Workers’ compensation insurance

Workers’ compensation insurance is mandatory for all employers in California, including general contractors. It covers medical expenses and lost wages for employees who are injured or become ill as a result of their work. This coverage also provides death benefits to the families of employees who are killed on the job.

Commercial auto insurance

Commercial auto insurance is required for any vehicle that is owned, leased, or used by a contractor for business purposes. It covers losses caused by accidents, theft, or damage to the vehicle, as well as injuries to third parties. This coverage is important for contractors who use vehicles to transport materials and equipment to and from job sites.

Builder’s risk insurance

Builder’s risk insurance is a specialized type of insurance that covers losses caused by damage to a construction project while it is under construction. This coverage can be purchased by the contractor or the property owner, and it typically covers losses caused by fire, theft, vandalism, and weather-related damage.

Professional liability insurance

Professional liability insurance, also known as errors and omissions insurance, protects general contractors from financial losses caused by professional mistakes or oversights. This coverage can be especially important for contractors who provide design or consulting services, as it covers losses related to errors in design, construction, or project management.

Cyber liability insurance

Cyber liability insurance is becoming increasingly important for contractors, as it covers losses caused by cyber attacks, data breaches, and other types of cybercrime. This coverage can be especially important for contractors who use technology and the internet to manage their business and store sensitive client information.

Employment Practices Liability Insurance (EPLI)

Employment Practices Liability Insurance (EPLI) is not typically a requirement for general contractors, but it is highly recommended in California due to the state’s strict labor laws. EPLI provides protection for employers against claims of wrongful termination, discrimination, and sexual harassment.

Contractors State License Board (CSLB)

In California, general contractors are required to be licensed by the Contractors State License Board (CSLB). To obtain a license, general contractors must meet certain insurance requirements, including having a minimum of $2,000,000 in General Liability coverage.

Public Works

If a contractor is bidding on public works projects in California, they will be required to have a valid contractor’s license and provide proof of insurance coverage. This includes General Liability, Workers’ Compensation, and Commercial Auto insurance.

In summary, while general contractors in California have similar insurance requirements to those in other states, there are some specific requirements such as the requirement to have Workers’ Compensation insurance, Employment Practices Liability Insurance, and a valid contractor’s license. Additionally, if a contractor is bidding on public works projects, they will be required to have specific insurance coverage.

Are there any different insurance requirements for a commercial general contractor vs. a residential general contractor in California? 

The insurance requirements for general contractors focused on residential projects may differ from those that specialize in commercial projects.

Residential

General contractors focused on residential projects typically need to have General Liability insurance and Workers’ Compensation insurance. General Liability insurance protects against third-party claims of property damage or bodily injury, while Workers’ Compensation insurance provides coverage for injuries or illnesses that employees may suffer on the job. They may also want to consider additional coverage such as Completed Operations coverage, which covers property damage or bodily injury that occurs after the work is completed.

Commercial

General contractors focused on commercial projects generally have similar insurance requirements to those that specialize in residential projects, but they may also require additional coverage. Commercial general contractors typically need to have General Liability, Workers’ Compensation, and Commercial Auto insurance. They also may need additional coverage such as Builder’s Risk insurance, which covers the cost of damage to the project while under construction, and Pollution Liability insurance, which covers the cost of cleaning up pollution caused by their work. They may also need to provide additional coverage to the property owner or the lender, such as a performance bond or payment bond.

Are general contractors required to be bonded in California?

No, general contractors in California are not required to be bonded. However, many general contractors choose to be bonded in order to provide additional protection to their clients and to demonstrate their financial stability. A bond is a type of insurance that guarantees the completion of a construction project. If a contractor fails to fulfill the terms of the contract, the bond can be used to compensate the client for any losses.

What does bonding cover in California?

Bonding covers financial losses that may occur as a result of a contractor’s failure to fulfill the terms of a construction contract. This includes non-completion of the project, non-payment of subcontractors or suppliers, or failure to meet the project’s specifications. A bond guarantees that the client will be reimbursed for any losses resulting from these circumstances.

What are the differences among being licensed, being bonded, and being insured?

Being licensed is a requirement set by the state to ensure that contractors have the necessary qualifications and experience to perform construction work. Being bonded is an optional protection that guarantees the completion of a construction project and provides compensation to clients in case of contractor’s default. Being insured is mandatory, it protects the contractor’s business from financial losses in case of accidents, injuries, or damages that may occur during the course of the work.

How much does general contractor insurance cost in California? 

The average cost of a $2M general liability insurance policy for general contractors in California is $144  per month, or $1,728 per year. This is the most common insurance policy that almost all general contractors in California have. 

Most general contractors in California pay between $104 to $1,520 per month for their general liability insurance. It is a wide range because liability insuance cost for general contractors varies significantly depending on several factors that we are discussing below. 

If general contractors also have workers comp and commercial auto insurance, they will pay more. Below are the average costs of these coverages for general contractors in California: 

General contractor insurance coverage Average costs in California 
General liability insurance $144 per month 
Workers comp insurance $192 per month per employee 
Commercial auto insurance $153 per month 
Builders’ risk insurance1-3% of the project value 

Keep in mind that these are just the averages. Your rates will be different. Be sure to shop around with a few companies or work with brokerage firms like Simply Business or Smart Financial to find the cheapest rate for your business. 

What factors affect general contractor insurance costs in California? 

There are several factors that can affect the cost of general contractor insurance in California. These include:

Type of construction

The type of construction project that the contractor is working on can have a significant impact on the cost of insurance. Projects that are considered to be higher risk, such as those that involve working at height or with hazardous materials, will typically require more extensive coverage and therefore cost more to insure.

Size of the contractor’s business

The size of the contractor’s business can also affect the cost of insurance. Smaller contractors may be able to secure lower rates by purchasing insurance through a group or association plan, while larger contractors may need to purchase more extensive coverage and may have to pay more for it.

Contractor’s experience and history

The contractor’s experience and history can also affect the cost of insurance. Contractors with a history of accidents or claims may be viewed as higher risk and may have to pay more for insurance as a result. On the other hand, contractors with a good safety record and a history of completing projects without incident may be able to secure more favorable rates.

Location of the project

The location of the construction project can also affect the cost of insurance. Projects that are located in areas that are prone to natural disasters or other risks may require more extensive coverage and therefore cost more to insure.

The coverage amount

The amount of coverage being purchased also affects the cost of insurance. A contractor who purchases more coverage will generally pay more for insurance than one who purchases less coverage.

In addition, the company that provide the insurance also play a role in the cost, each company have different pricing strategies and policies. It’s always wise to shop around and compare rates from different insurance providers before making a decision.

What California general contractors can do to lower their insurance premiums: 

There are several things that general contractors in California can do to lower their insurance premiums:

Maintain a good safety record

One of the most important things contractors can do to lower their insurance premiums is to maintain a good safety record. By implementing and enforcing safety protocols, conducting regular safety training, and actively working to prevent accidents and injuries, contractors can demonstrate to insurance providers that they are a lower risk and therefore may be able to secure more favorable rates.

Implement a risk management program

Implementing a risk management program can also help contractors to lower their insurance premiums. By identifying potential risks and hazards and taking steps to mitigate them, contractors can reduce the likelihood of accidents and claims and therefore be viewed as a lower risk by insurance providers.

Shop around for insurance

Shopping around for insurance and comparing rates from different providers can also help contractors to lower their premiums. Each insurance company has their own pricing strategy, by comparing rates from different providers, contractors can find the best deal and secure the most favorable rates.

Bundling insurance policies

Bundling insurance policies such as General Liability, Workers’ Compensation, and Commercial Auto policies together with one insurance company can sometimes provide a discounted rate.

Raise deductibles

Finally, contractors can also lower their insurance premiums by raising their deductibles. By agreeing to pay a higher amount out of pocket in the event of a claim, contractors can lower their overall insurance costs. However, it’s important to consider the financial risk that comes with this and make sure you have enough funds to cover the increased deductibles.

What California general contractors should pay attention to when buying insurance

When buying insurance, California general contractors should pay attention to the following:

Types of coverage

General contractors should make sure that they are purchasing the types of coverage that are appropriate for their business. This typically includes General Liability, Workers’ Compensation, and Commercial Auto insurance. It is important to understand what each policy covers and what exclusions apply.

Limits of coverage

General contractors should also pay attention to the limits of coverage provided by their insurance policies. This includes the maximum amount the insurance company will pay out in the event of a claim, as well as any per-occurrence or aggregate limits. It is important to purchase limits that are adequate for their business and the type of work they are doing.

Endorsements

General contractors should also pay attention to any endorsements or additional coverage options that may be available. Some endorsements that might be relevant for general contractors include: completed operations, contractor’s equipment, and builder’s risk.

Policy exclusions

It is also important to read through the policy exclusions to understand what is not covered. Be aware of any exclusions that may affect your business, such as those related to faulty workmanship, pollution, or cyber liability.

Service of the insurance company

General contractors should also pay attention to the service provided by the insurance company, this includes the claims process, the responsiveness of the company, and the quality of their customer service. It is important to work with a company that is responsive and easy to work with.

Price

Price is also a consideration when buying insurance, but it should not be the only factor. It’s important to find a balance between cost and the coverage that is appropriate for your business.

It’s always best to work with an insurance agent or broker who is familiar with the specific risks and requirements of the construction industry and can help you to find the right coverage for your business. 

Final thoughts

In conclusion, choosing the right insurance company is crucial for California general contractors to protect themselves and their clients from potential liabilities and financial losses. The 5 best general contractor insurance companies in California are Simply Business, CoverWallet, NEXT, Smart Financial, and InsurePro. Each of these companies offers a variety of coverage options at competitive prices, and it is important to do your research and choose the company that best fits your business needs. Remember to pay attention to coverage options, premiums, financial stability, claim process, and tailor coverage to your business needs.

Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at realtor.com, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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