GL + Workers' Comp + Bond: The Three Policies Every CA Contractor Needs

Quick answer: Every California contractor should treat three protections as non-negotiable: general liability (covers third-party injury and property damage), workers' compensation (covers your employees' injuries and is now required for all licensed contractors under SB 216), and the $25,000 CSLB license bond (required to keep your license active). Together they form the legal and financial foundation for bidding real work.

Why these three, and why together?

Think of your protection as a three-legged stool. Pull one leg and the whole thing tips over. Each of these three does a completely different job, and general contractors, project owners, and the state itself check for all three before you can work. Skip one and you'll either lose your license, lose a lawsuit, or lose the bid.

Here's the short version before we dig in:

• General liability protects other people from harm your work causes.
• Workers' comp protects your own crew when they get hurt.
• The CSLB bond protects your customers and the public and keeps your license valid.

Leg 1: General liability — protecting third parties

Commercial general liability (CGL) is the everyday workhorse. It responds when your operations cause bodily injury or property damage to someone who isn't your employee: a client, a passerby, a neighboring property. If your crew floods a downstairs unit, or a homeowner trips over your materials and breaks a wrist, GL pays the defense costs and the settlement up to your limit.

The standard limit contractors carry is $1 million per occurrence and $2 million aggregate. Most GCs will additionally require you to name them as an additional insured using ISO endorsements CG 20 10 (ongoing operations) and CG 20 37 (completed operations), plus primary and non-contributory wording and a waiver of subrogation. Those add-ons don't change your day-to-day coverage — they change who else gets protected and in what order. Typical 2026 GL premium runs roughly $600 to $2,500+ per year, with hazardous trades like roofing, framing, and concrete on the higher end.

Leg 2: Workers' compensation — now required for everyone

Workers' comp pays medical treatment and a share of lost wages when an employee is injured on the job, regardless of fault. In return, it shields you from most injury lawsuits by your own workers. It's rated on your payroll by class code and modified by your experience modification rate (X-Mod), which reflects your claims history.

The rules changed with Senate Bill 216. California phased out the exemption that allowed certain license classifications to operate without workers' comp, so as of January 1, 2026, essentially every licensed contractor must carry a workers' compensation policy — even a licensee with no employees, in several classifications. Roofers (C-39) have long needed it regardless of headcount; SB 216 pushed that requirement across the board. Confirm your obligation with the California Division of Workers' Compensation and the CSLB.

Leg 3: The CSLB $25,000 license bond

Every active California contractor license must be backed by a $25,000 contractor license bond on file with the Contractors State License Board. A common misconception is that this bond protects you — it does not. It's a surety bond that guarantees you'll follow contracting law. If a customer or employee files a valid claim (say, for abandoned work or unpaid wages) and the surety pays, you must repay the surety in full.

Because it's underwritten on credit rather than risk, the bond is cheap: often $100 to $400 per year for contractors with good credit, higher for weaker credit. Some contractors also need a bond of qualifying individual depending on their license structure. The bond keeps your license active; without it, the CSLB suspends you and you can't legally contract.

What the three cost together in 2026

Ranges are typical for small-to-midsize California contractors and vary by trade, payroll, revenue, credit, and claims history. We never quote a guaranteed price without reviewing your operation.

How they show up on a job

When you win a subcontract, the GC's compliance team asks for a certificate of insurance proving all three are in force, with your GL endorsed the way their contract demands. Miss one — an expired bond, a lapsed comp policy, a missing additional insured endorsement — and you get pulled off the schedule until it's fixed. Carrying all three, correctly structured, is what keeps you eligible for the jobs worth having.

General information only, not legal or coverage advice. Confirm current requirements with your agent, the CSLB, and the California DIR.