Contractor Insurance

Contractors

Insurance for Contractors

Contractors’ Insurance is important to construction and contracting companies. You face serious risks every day; where injuries, property or equipment damage can be common. Here with Goldamity, you will find a one-stop shop with different types of insurance for your needs. Our talented brokers specialize in the complex risks of construction/contracting, providing you with the right insurances to keep your business and team safe. We offer the option of payment plans to help you manage your cash flow.

Small business insurance

Types of Contractor Insurance

CONTRACTOR

General Liability

General Liability Insurance is the primary coverage needed by contractors. It is often a prerequisite for getting approved for new projects and ensures that contractors are able to receive payment after completing their work. This type of insurance provides protection against claims involving property damage, faulty workmanship, or injuries to others, which are common risks in the contracting industry. In the event of a lawsuit or claim, General Liability Insurance helps cover legal fees and any damages awarded. This financial protection is crucial for contractors, who might otherwise face significant out-of-pocket expenses. Having this insurance not only fulfills legal and contractual requirements but also boosts a contractor’s credibility. It reassures clients that the contractor is professional and prepared to handle any issues that might occur. Policies can be customized to fit the specific needs and risks associated with the contractor’s type of work, providing peace of mind and security for both the contractor and their clients.

FOR WORKERS

Workers' Compensation

Worker’s compensation insurance is an essential requirement for all licensed contractors in California, mandated by the California Contractor State License Board. This insurance is crucial for ensuring that contractors can maintain a valid license. Regardless of whether a contractor employs workers or not, carrying worker’s compensation insurance is a legal obligation. This requirement emphasizes the importance of preparedness and compliance with state regulations. For contractors with employees, this insurance provides coverage for medical expenses and lost wages in the event of work-related injuries or illnesses. Even if contractors operate without employees, having this insurance is a safeguard against potential liabilities. Maintaining worker’s compensation insurance is directly tied to the validity of a contractor’s license. Failure to comply with this requirement can result in penalties, fines, or even suspension of the contractor’s license. Contractors must provide proof of insurance coverage to the Contractor State License Board. This documentation is a part of the licensing process and must be updated regularly to reflect any changes in coverage.

CONTRACTOR

Contractor Bonds

Contractor Bonds can be used to safeguard against financial loss, ensure legal compliance, or ensure the completion of a project. Understanding the specific purpose of the bond will help you in selecting the correct type of bond and in fulfilling the obligations associated with it. To guarantee compliance and prevent any possible problems, it is essential to pay close attention to a few essential components while applying for a bond. Determine the obligee first; this might be the Contractors State License Board (CSLB) or another organization requesting the bond. Next, confirm the bond amount and the date of the obligee’s implementation. Verify that the bond’s business name and license classification correspond to those in the CSLB database. It is vital to maintain your bond active continuously without any lapses. By focusing on these aspects, you can ensure a smooth bond application process and maintain good standing with the required entities.
Currently, the CSLB requires two types of bonds in order to keep an active contractor license:

Contractor Bond:

All licensed contractors in California are required by (CSLB) to maintain a $25,000 contractor license bond. This bond is designed to protect consumers and employees by ensuring that contractors operate in compliance with state laws, pay all valid claims, and uphold ethical business practices. If a contractor violates licensing laws a claim can be made against the bond. Common claims filed are related to causing property damage, or breaching a contract.

Employee/worker bond:

Starting January 1, 2026, all LLCs licensed through the CSLB will be required to carry a $100,000 Employee/Worker Bond. This bond is a financial guarantee to ensure that employees will be paid the wages they’re owed, and it protects against claims for unpaid wages, benefits, or other financial obligations owed by the employer.

Performance bond:

A type of surety bond commonly required on construction projects, especially public works or large private developments. It serves as a financial guarantee that a contractor will complete a project according to the terms and specifications of the contract.

Payment bond:

This bond is specifically designed to ensure that subcontractors and suppliers receive payment for their work and materials. This type of bond helps protect these parties from financial loss if the contractor fails to make the necessary payments.

Bid bond:

This bond is often required during the bidding process for construction projects and serves as a guarantee that the contractor will honor their bid, sign the contract, and provide the required performance and payment bonds.

FOR VEHICLES

Commercial Auto

Commercial auto insurance is essential for a variety of reasons. California is notorious for its busy streets and severe traffic congestion. In such an environment, the value of commercial auto insurance is heightened due to its ability to offer higher liability limits, protection for goods in transit, and coverage for multiple drivers or vehicles. This insurance provides crucial protection for businesses against expensive bodily injury and property damage claims. The DMV mandates specific insurance coverage for vehicles used commercially, including the filing of a special proof of insurance called an MCP65 along with a valid Motor Carrier Permit. Clients and contracts will also require businesses to show proof of commercial auto insurance to be hired or maintain compliance with agreements.

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