California has some of the most comprehensive contractor licensing requirements in the country. The Contractors State License Board (CSLB) regulates over 300,000 licensed contractors in the state, and compliance with their insurance and bond requirements is mandatory to maintain your license in good standing.
Here's what every California contractor needs to know for 2025.
Who Needs a CSLB License?
Any contractor who performs construction work valued at $500 or more (labor and materials combined) in California must hold a valid CSLB license. This includes general contractors, specialty contractors, and subcontractors across all trades.
Required: $25,000 Contractor License Bond
All California licensed contractors must maintain a $25,000 contractor license bond (also called a CSLB bond or contractor surety bond) at all times. This requirement was updated from $15,000 to $25,000 under Senate Bill 607, effective January 1, 2023.
The bond protects consumers if you cause damages, fail to complete a project, or violate state licensing laws. If your bond lapses, the CSLB will automatically suspend your license.
Cost: Most contractors pay between $100 and $300 per year.
Required: Workers' Compensation Insurance (If You Have Employees)
California law requires all contractors who employ workers — even one part-time employee — to carry workers' compensation insurance. Penalties for non-compliance are severe, including stop-work orders, fines, and potential criminal charges.
Sole owner-operators with no employees may file a Certificate of Exemption with the CSLB, but this exemption only applies to your own work — the moment you hire anyone, coverage becomes mandatory.
Important: Many GCs and commercial clients require proof of workers' comp regardless of whether the state technically requires it for your situation.
Not Required by CSLB — But Practically Mandatory: General Liability Insurance
Surprisingly, California does not require contractors to carry general liability insurance as a licensing condition. However, this doesn't mean you can skip it.
In practice, virtually every general contractor, property owner, school district, municipality, and commercial client will require proof of general liability insurance before allowing you on a job site. Carrying GL is an industry standard, not an optional extra.
Typical minimum required limits:
- Residential work: $500,000 to $1M per occurrence
- Commercial work: $1M to $2M per occurrence
- Public/government contracts: $2M+ per occurrence, often with umbrella requirements
Bond of Qualifying Individual
If the person qualifying your license (the RMO or RME) is not an owner of the company, an additional $12,500 Bond of Qualifying Individual is required. This is separate from the standard contractor license bond.
Other Coverages to Consider
While only the license bond and workers' comp (if applicable) are technically required by the CSLB, most professional contractors also carry:
- Commercial auto: Required if any vehicles are used for business
- Inland marine / tools & equipment: Covers tools stolen or damaged on the job
- Builder's risk: Covers structures under construction
- Umbrella liability: Provides extra coverage above your GL and auto limits
- Professional liability (E&O): For design-build or consulting work
How to Stay Compliant
- Keep your bond and workers' comp policies active at all times — any lapse can trigger a license suspension
- Update the CSLB if you change insurance carriers or policies
- Track your policy renewal dates — set calendar reminders at least 60 days before expiration
- Work with a broker who sends renewal reminders and handles CSLB filings for you
How Altamira Can Help
Altamira Insurance Agency specializes in contractor insurance across California. We understand CSLB requirements, handle bond filings directly with the state, and make sure your coverage is always in good standing. Whether you need a license bond, workers' comp, general liability, or a full commercial insurance package, we've got you covered.
Request a quote online or call us — we work exclusively with contractors and know what you need to stay licensed and protected in California.