You passed the exams, the CSLB issued your number, and the work is out there. Before the first contract gets signed, there’s a stack of insurance to line up — and the order matters, because some of it is legally required before you can operate at all, and some of it only becomes urgent when the first GC sends over an insurance exhibit. Here’s the sequence we walk new contractors through.
1. The $25,000 license bond — required to have a license at all
No bond on file, no active license. The CSLB license bond is a licensing requirement, not optional coverage, and it’s the fastest item on this list — most bonds are issued same-day and filed electronically. You pay a small annual premium, not the $25,000. Going the LLC route? Budget for the additional $100,000 LLC employee/worker bond and the $1 million liability requirement that comes with it. Full bond explainer here.
2. Workers’ Compensation — required for every licensee
As of January 1, 2026, every actively licensed California contractor must carry Workers’ Comp — even sole owners with no employees. This is a change that catches new licensees off guard, because plenty of advice floating around online predates it. Premiums are based on your class codes and payroll, so a small operation pays small premiums — but a lapse means automatic license suspension. Set it up once, keep it renewed.
3. General Liability — required by every job worth having
The law may not demand GL for most classifications, but the market does: virtually no GC, project owner, or property manager will let you on site without a certificate showing $1M/$2M limits. Two setup details save you headaches all year:
- Get blanket additional insured, waiver of subrogation, and primary & non-contributory endorsements built into the policy from day one — they’re what insurance exhibits actually ask for. Here’s the full decoder.
- Make sure you can issue certificates instantly. Insureaze clients generate their own COIs from the client portal in seconds — which matters when a GC wants paper before tomorrow’s mobilization.
4. Commercial Auto — the day your truck starts working
Your personal auto policy excludes business use, and “hauling tools to a job site” is business use. If the truck works, it needs a commercial policy — ideally at the $1M combined single limit contracts expect. More on where that line falls.
5. Inland Marine — when the tools outgrow the risk you can eat
Early on, you might shrug off the loss of a few hand tools. But gear accumulates fast, and theft from trucks and job sites is the most common contractor equipment claim. When replacing your equipment would genuinely hurt, add an Inland Marine policy — it follows your tools to the site, down the road, and into storage, and it can cover rented equipment for less than the rental house’s damage waiver.
6. Set up your certificate workflow before you need it
The insurance itself is half the job; proving it quickly is the other half. Decide on day one how COIs get issued, how renewals get tracked, and where subs’ certificates live when you start using subs. Our answer is the client portal: instant certificates, renewal reminders, and sub tracking in one place.
The mistakes we see first-year contractors make
- Buying minimum limits to save money, then losing a bid because the contract wanted $2M aggregate — quote the limits the work requires, not the cheapest legal floor
- Letting a policy lapse between jobs — gaps show on your record, trigger license suspension (comp and bond), and make the next policy more expensive
- Guessing at payroll and receipts — honest estimates now prevent painful audit bills later
- Waiting until a job is won to sort insurance — coverage takes a conversation, but endorsements and certificates take setup; do it before bid season
The whole stack is one conversation for us: tell us your trade, your plans, and what your contracts require, and we’ll come back with real options — usually within one business day.