If you’re a contractor in California, you may have noticed that getting General Liability insurance, Workers’ Compensation, or renewing an existing policy now involves more paperwork, follow-ups, and inspections than in the past. This shift isn’t random — it reflects major changes in how insurance carriers underwrite construction risks.
Understanding why carriers are asking more questions — and how to prepare — can help you secure better pricing, avoid non-renewals, and prevent coverage gaps.
Construction Insurance Underwriting Is Getting Stricter
Contractors are considered one of the highest-risk industries in insurance. In recent years, carriers have faced increased losses due to:
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Rising construction defect claims
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Higher medical and legal costs
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Subcontractor-related losses
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Larger verdicts and settlements
As a result, many insurers have reduced capacity, exited California entirely, or tightened underwriting guidelines for contractors. Those still writing policies are reviewing risks much more closely.
Carriers Want Detailed Descriptions of Contractor Operations
Underwriters no longer accept vague descriptions like “general contractor” or “construction services.”
Today, they want specifics, including:
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Residential vs. commercial work percentages
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New construction vs. remodel vs. repair
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Maximum height exposure (number of stories)
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Types of trades performed (carpentry, concrete, framing, tile, etc.)
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Percentage of work subcontracted vs. self-performed
Clear, accurate descriptions often lead to better insurance rates and fewer underwriting issues.
Payroll Accuracy Is Critical for Workers’ Compensation
For Workers’ Compensation insurance, payroll is one of the biggest rating factors. Carriers are paying close attention to:
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Correct class code usage
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High-wage vs. standard-wage classifications
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Owner payroll and field involvement
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Use of payroll reporting programs
Incorrect payroll estimates or misclassification frequently result in audit increases, penalties, or coverage disputes.
General Liability Inspections Are Now Common
Many contractor General Liability policies now require:
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Phone inspections
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Virtual inspections
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Occasional job site confirmations
These inspections verify:
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Actual work performed
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Tools and equipment used
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Safety practices
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That operations match what was disclosed on the application
Failing to respond to inspection requests can result in policy cancellation, even if premiums are paid.
How Contractors Can Improve Insurance Results
Contractors who consistently receive better pricing and smoother renewals typically:
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Keep payroll and revenue estimates accurate
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Clearly define the scope of work they accept
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Avoid listing work they don’t actually perform
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Respond promptly to carrier requests
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Work with a broker who specializes in contractor insurance
At Insureaze, we focus on properly positioning contractor risks before they ever reach underwriting — which often determines whether a policy is approved, declined, or priced competitively.
Bottom Line: Preparation Matters More Than Ever
Insurance carriers aren’t targeting contractors — they’re managing risk in a challenging market. Contractors who are organized, transparent, and properly represented can still obtain strong coverage and competitive rates, even in California’s tightening insurance environment.
If you’re experiencing more questions, inspections, or non-renewals, it’s not personal — it’s the market. And with the right guidance, it’s manageable.