What insurance does a contractor license require?
It depends on the state, and the state minimum is almost never the number your contracts will ask for. California requires a $25,000 license bond from every contractor, $1,000,000 of liability insurance from a contractor licensed as an LLC, and workers compensation from anyone with employees and from five trades even without them. Florida requires $300,000 of liability and $50,000 of property damage coverage from general and building contractors. Washington requires a $30,000 bond from general contractors and liability limits as low as $50,000 for property damage. Oregon ties a bond and a liability minimum to each endorsement, up to an $80,000 bond and $2,000,000 of liability for the largest commercial contractors. Arizona requires a bond and no liability insurance at all. A bond is not insurance: it pays your customer when you fail them, and the surety then collects from you.
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Joe Gorman
Co-Founder | President of Commercial Lines
Came up in construction, on site and in the office, then moved into sales. Went out on a limb to become Boring’s first dedicated salesperson when the agency had no sales team at all, and now leads it. Landscaping is the class he writes most: grounds maintenance, tree work, irrigation and the spray operations that push an account out of preferred appetite.
Send us what you have. We’ll tell you if it’s right.
Your current policy paperwork, a renewal notice, or nothing at all. A licensed agent reads it and replies the same business day.
The detail
California requires, as a condition of issuing, renewing or keeping a license, "a contractor’s bond in the sum of twenty-five thousand dollars ($25,000)". The amount has applied since January 1, 2023.
A California contractor licensed as a limited liability company must carry liability insurance of "not less than one million dollars ($1,000,000)" when five or fewer persons are listed on the license, plus $100,000 for each additional person, up to $5,000,000. The policy may be claims-made or occurrence.
A California LLC licensee also files a $100,000 surety bond "for the benefit of any employee or worker damaged by the LLC’s failure to pay wages, interest on wages, or fringe benefits", on top of the $25,000 contractor bond.
Contractors State License Board, Licenses for Limited Liability Companies (B&P Code 7071.6.5)
California licensees must file a certificate of workers compensation insurance or an exemption certifying they have no employees, except that "All active C-8 Concrete contractors, C-20 Warm-Air Heating, Ventilating and Air-Conditioning contractors, C-22 Asbestos Abatement contractors, C-39 Roofing contractors, and/or C-61/D-49 Tree Service contractors are required to carry workers’ compensation insurance or a valid Certification of Self-Insurance, whether or not they have employees."
Contractors State License Board, Maintaining Your Workers’ Compensation Insurance (B&P Code 7125)
A Florida applicant for certification submits an affidavit "attesting to the fact that the applicant has obtained workers’ compensation insurance as required by chapter 440, public liability insurance, and property damage insurance for the safety and welfare of the public, in amounts determined by rule of the board."
Florida’s board rule sets the minimums at $300,000 public liability and $50,000 property damage for general and building contractors, and $100,000 and $25,000 for residential, sheet metal, air conditioning, roofing, mechanical, pool, plumbing, underground utility and excavation, solar and pollutant storage contractors.
Florida Administrative Code rule 61G4-15.003, Public Liability Insurance
Washington requires a registration bond "in the sum of $30,000 if the applicant is a general contractor or $15,000 if the applicant is a specialty contractor", amounts in force since July 1, 2024.
Washington requires insurance of "fifty thousand dollars for injury or damages to property, and one hundred thousand dollars for injury or damage including death to any one person, and two hundred thousand dollars for injury or damage including death to more than one person."
Oregon sets a bond and a general liability minimum for each residential endorsement: $25,000 and $500,000 for a residential general contractor, $20,000 and $300,000 for a residential specialty contractor, and $15,000 and $100,000 for a residential limited contractor.
Oregon’s commercial endorsements require an $80,000 bond and $2,000,000 of general liability for a commercial general contractor level 1, $55,000 and $1,000,000 for a commercial specialty contractor level 1, $25,000 and $1,000,000 for a commercial general contractor level 2, and $25,000 and $500,000 for a commercial specialty contractor level 2.
Arizona requires a surety bond or cash deposit and no liability insurance. A residential general contractor posts $5,000 to $15,000; a commercial general contractor’s bond scales with annual volume, up to $50,000 to $100,000 above $10 million a year.
What this means for you
- The license minimum is a floor, not a target. Washington will register a contractor carrying $50,000 of property damage coverage. Almost no general contractor, property manager or public agency will sign a subcontract with one. The common construction baseline is $1,000,000 per occurrence and $2,000,000 aggregate, with the client named as an additional insured. Buy for the contracts you want to sign, and the license requirement is met along the way.
- A license bond is not insurance. The bond exists for your customers, your workers and the state. When a claim against it is paid, the surety turns to you for the money, because you signed an indemnity agreement to get the bond. A liability policy is the reverse: it pays on your behalf and does not ask for the money back. A contractor who has a bond and no policy has bought protection for everybody except themselves.
- Read the classification, not just the state. California asks most contractors for a certificate or an exemption, and asks concrete, HVAC, asbestos, roofing and tree service contractors for workers compensation even with nobody on payroll. Florida’s figures differ between a general contractor and a plumber. Oregon’s differ by endorsement. The license you are applying for decides the number.
- An LLC changes the California answer. A sole owner licensed as a corporation or sole proprietor files the $25,000 bond. The same owner licensed as an LLC files that bond, a $100,000 worker bond and proof of at least $1,000,000 of liability insurance. Decide the entity with that in mind.
- Ask the person who has stood on the job site. Joe Gorman, who leads commercial lines here, came up in construction, on site and in the office, before he sold insurance. Send us the license application, the classification and the contract you are trying to sign, and we will tell you what satisfies both.
Related questions
- Do I need insurance to get a contractor license?
In most states that license contractors, yes, at least for some licenses. California requires workers compensation or an exemption from every licensee and liability insurance from LLCs. Florida, Washington and Oregon require liability insurance by statute or rule. Arizona requires only a bond. The board names the document it wants, usually a certificate sent by your agent directly to the board.
- What is the difference between a contractor license bond and insurance?
A bond protects the people you work for and with. If you abandon a job or fail to pay workers, a claim is paid from the bond and the surety then collects from you. Insurance protects you: a liability policy pays for injury or property damage you cause and does not seek repayment. Most licensing boards require the bond, and some require both.
- How much general liability does a California contractor need?
The license statute sets a figure for LLC licensees: at least $1,000,000 when five or fewer people are on the license, rising by $100,000 per additional person to $5,000,000. Contracts are another matter, and most ask for $1,000,000 per occurrence and $2,000,000 aggregate.
- Does a California roofer need workers comp with no employees?
Yes. The CSLB requires C-39 roofing contractors, along with C-8 concrete, C-20 HVAC, C-22 asbestos abatement and C-61/D-49 tree service contractors, to carry workers compensation or a certificate of self-insurance whether or not they have employees. An exemption is not available to those classifications.
- Is the Washington insurance minimum enough to work for a general contractor?
Rarely. The registration statute asks for $50,000 property damage and $100,000 or $200,000 bodily injury, which is a fraction of the $1,000,000 per occurrence most subcontract agreements set. Register on the policy you will need for your contracts rather than buying the minimum twice.
- What if I was declined for workers comp and the board needs a certificate?
That is a placement problem we solve often. A professional employer organization can carry your crew on its own policy, and most states run a state fund or an assigned risk plan as the market of last resort. Either produces a certificate the board accepts. Tell us the classification, your payroll and why you were declined.
Need this handled?
Reading about it and having it handled are different jobs, and the second one is ours. We place the accounts other brokers decline — claims history, a cancellation, an unusual operation, a business nobody wants to underwrite twice — and we will tell you when the policy you already have is the right one. Tell us the situation and a licensed human replies the same business day.
Written by the licensed brokers at Boring Insurance. Last updated 2026-10-04. See all guides.