License bond or insurance: what each one does for a California contractor
Need a CSLB bond? A licensed agent quotes it by phone. It needs the owner's Social Security number, so it is not online.
Call or text for your bond: (877) 940-4313Mon–Fri, 8am–5pm Pacific
Explained simply
A bond is a promise with a backer. Break the license law and hurt someone the bond names, and the backer pays them, then bills you. Insurance is the reverse: the insurer pays a covered accident, and you only owe your deductible.
Your CSLB licence sits on top of a bond, and your contracts usually ask for insurance. They sound alike but they work in reverse: a bond is money you can end up owing, insurance is money paid on your behalf.
Bond vs. general liability at a glance
| $25,000 license bond | General liability policy | |
|---|---|---|
| What it is | A guarantee you follow license law | Coverage for accidents your work causes |
| Who it pays | People the law names, like homeowners and unpaid workers | Others you injure or whose property you damage |
| Who repays it | You repay the surety | Nobody, beyond your deductible |
| Required for | Every CSLB licensee | LLCs by law; GCs by contract |
| With CalRisk | Quoted by phone | Quoted online |
The details · tap to open
Two different promises
A bond backs your conduct; insurance pays covered accidents for you.
A surety bond is a three-way deal. You are the one making the promise, the State of California is the one it runs to, and a surety company stands behind you. The promise is that you will follow California's contractor license law. If a valid claim is paid, the surety then collects that money from you. The bond does not absorb the loss. It fronts it.
An insurance policy works the other way around. You pay a premium, and in return the insurer pays covered claims for you, up to your limits. You are not asked to pay those claims back. Your only share is the deductible.
That is why one cannot stand in for the other. A bond does not pay for the window your crew broke, and a GL policy does not satisfy CSLB's bond requirement. Many contractors carry both, and they answer completely different questions.
Size works differently too. The bond amount is fixed by law and is there for the people the bond lists. Your insurance limits are something you pick, and they are there to protect your business.
The bonds a California licence can carry
The $25,000 license bond, the LLC worker bond and the qualifier bond.
- Contractor license bond: $25,000 (B&P §7071.6). Every licensee carries one, whatever the entity: sole owner, partnership, corporation or LLC. The amount went up from $15,000 effective 1/1/2023. Under B&P §7071.5 it runs in favor of the State and can pay a homeowner who contracted for home improvement on their own home and was damaged by a license-law violation, an owner building a single-family home that is not for sale, anyone damaged by a willful and deliberate violation or fraud in a construction contract, your employees for unpaid wages, and anyone damaged by unpaid fringe benefits.
- LLC worker bond: $100,000 (B&P §7071.6.5). Only for LLC licences. It backs employees' wages, interest on those wages and fringe benefits, including union contributions under a collective bargaining agreement. It is added on top of the $25,000 bond.
- Bond of qualifying individual: $25,000 (B&P §7071.9). Required when the person who qualifies the licence is not the proprietor, a general partner or a joint licensee. It is not needed if that person owns 10% or more of the corporation or LLC. This bond is separate from the license bond.
All three follow the same rule: the surety pays the valid claim, then turns to you for the money.
Two job-site stories
An accident goes to GL; a license-law dispute can reach the bond.
Story one. Your helper backs a wheelbarrow into a client's sliding door and shatters it. Later that week, a delivery driver slips on your drop cloth and hurts his back. Both are harm to people outside your company. That is the territory of general liability. The claim goes to your insurer, and you pay your deductible.
Story two. A homeowner files a complaint saying you broke the contracting rules on their remodel and it cost them money. That is not an accident. A claim like that can be made against your license bond. If the surety pays it, the surety then asks you to repay every dollar.
Clients look for these in different places. A homeowner can see your bond on your CSLB licence record and reads the insurance notice in your contract (see the contract insurance notice). A GC asks for a certificate of insurance and usually wants to be named additional insured. Being on the certificate as holder is not the same thing. See additional insured endorsements.
Where insurance fits in
GL covers harm to others; workers' comp covers your crew.
General liability generally covers bodily injury and property damage your work causes to other people, plus completed operations when the policy includes it. It does not cover your own employees' injuries, your tools, your vehicles, or the cost of redoing faulty work. More on that in what general liability does not cover.
CSLB does not require GL by law for most licensees, but it strongly recommends it, and GCs, commercial owners and many homeowners write it into their contracts. LLC licences are different: B&P §7071.19 requires liability insurance with at least $1,000,000 aggregate, rising with the number of people on the licence. Details are in the CSLB LLC insurance requirement.
Workers' comp is its own requirement. Every licensee files a workers' comp certificate or an exemption with CSLB (B&P §7125). C-8 concrete, C-20 HVAC, C-22 asbestos abatement, C-39 roofing and D-49 tree service must carry it even with no employees. SB 216 set 1/1/2026 for all licensees, and SB 1455 (2024) pushed that to 1/1/2028. See workers' comp and the 2028 change.
Quick reference
Each bond and policy, who needs it, who ends up paying.
| Item | Who carries it | Who it is for | Who pays in the end |
|---|---|---|---|
| $25,000 license bond | Every licensee | Homeowners, workers and others the law names | You, after the surety pays |
| $100,000 worker bond | LLC licences | The LLC's employees: wages and benefits | You, after the surety pays |
| $25,000 qualifier bond | Licences whose qualifier is not an owner as described above | The same people as the license bond | You, after the surety pays |
| General liability | LLCs by law; others by contract | You, against claims from others | The insurer, for covered claims |
| Workers' comp | Employers, plus five classes with no employees | Your employees | The insurer, for covered claims |
How CalRisk handles bonds and insurance
GL and workers' comp online; bonds by phone with an agent.
A bond application needs the owner's Social Security number, so CalRisk Insurance Center quotes bonds by phone with a licensed agent rather than online. Call or text (877) 940-4313. Commercial auto and umbrella are handled the same way.
General liability and workers' comp are quoted online from your CSLB license number. Enter it, answer about a minute of questions, and quotes from A-rated programs come in at $1M per occurrence and $2M aggregate, with the deductible and what each includes and excludes. Pick one and tap "Submit for approval." A licensed agent finishes it and emails the final quote for you to sign. Nothing is bound until you sign. California only, in English or Spanish.
Not sure what your trade needs? Start at contractor insurance by trade.
Common questions
What is the difference between a contractor bond and insurance?
A bond guarantees you follow California's license law. When it pays a valid claim, the surety collects the money back from you. Insurance pays covered accident claims for you, and your only cost is the deductible.
How much is a California contractor license bond?
The license bond is $25,000 for every licensee under B&P §7071.6. It was $15,000 before 1/1/2023. LLCs also carry a $100,000 worker bond.
Does my license bond cover damage I cause on a job?
No. Accidental injury or property damage to others is a general liability matter. The license bond is for people the law names who are hurt by a license-law violation, such as homeowners and unpaid workers.
Do I have to pay back a claim on my contractor bond?
Yes. The surety pays the valid claim first and then collects that amount from you. That is the biggest difference from an insurance policy.
Can I buy a contractor bond online from CalRisk?
No. Bonds need the owner's SSN, so a licensed agent quotes them by phone at (877) 940-4313. General liability and workers' comp are quoted online from your CSLB license number.
General information about California rules, not legal advice. Check your own licence with CSLB. Coverage is subject to the policy's terms, conditions and exclusions, and to the insurance company's approval. Some licence types are quoted by an agent instead of online. Updated 2026-10-25.