How much liability insurance a CSLB LLC licence must carry

California has required every LLC contractor licence to carry liability insurance since 1/1/2014. The law sets the minimum as an aggregate limit: the total the policy will pay across all claims in one policy period.

• With 5 or fewer people on the licence's personnel of record, the aggregate must be at least $1,000,000.
• Every person beyond 5 adds $100,000.
• The requirement tops out at $5,000,000.

Your personnel of record is the list of people CSLB shows on file for your licence. It is not your crew count and not your payroll.

For anything over 5 people: take the number of people listed, subtract 5, multiply by $100,000 and add $1,000,000. Once that reaches $5,000,000 at 45 people, it does not climb further.

Look up your licence on the CSLB website, count every name in the personnel section, and run the math. Do it again any time a member or officer is added.

An example: an LLC that runs a three-person crew but lists 8 people on its personnel of record needs at least $1,300,000 aggregate, because the law counts the names on the licence, not the people in the truck. One that lists 12 people needs at least $1,700,000, which still fits inside a $2M aggregate policy.

The statute limits who can write the policy. The insurer has to be either:

• admitted in California, or
• an eligible surplus line insurer.

Either one satisfies CSLB. The difference is the regulatory route the company uses in California, not whether your coverage counts. Your licensed agent will tell you which kind a given quote is.

This rule covers liability to other people. It has nothing to do with workers' comp, which every licensee handles separately by filing a certificate or an exemption. See the workers' comp and 2028 guide.

An LLC licence carries three separate obligations, and only one is insurance.

• Contractor license bond, $25,000 (B&P §7071.6). Required of every licensee regardless of entity type. It went up from $15,000 on 1/1/2023.
• LLC worker bond, $100,000 (B&P §7071.6.5). Only LLCs carry it. It backs your employees' wages, interest on those wages and fringe benefits.

Neither bond counts toward the insurance minimum. And a bond is not insurance for you: if the surety pays a claim, it collects that money back from the contractor. Read bond vs insurance for the full picture. Bonds need the owner's Social Security number, so a licensed agent quotes them by phone at (877) 940-4313.

You do not send CSLB a copy of your policy yourself. The insurance company files the proof. Once the policy is active, ask your agent to confirm that filing went through.

If the policy lapses, or your limit falls below what your personnel count requires, CSLB can suspend the licence. A suspended licence cannot contract, so every open job is at risk. Renew early and recheck the limit whenever your personnel of record changes. A once-a-year habit works well: open your licence on the CSLB site, count the listed people, run the formula and hold it up against the aggregate on your declarations page.

Common slip-ups to avoid:

• Sizing the policy to the crew instead of the names on the licence.
• Adding an officer and never raising the limit.
• Checking the per-occurrence line instead of the aggregate line.
• Assuming the bonds count toward the insurance minimum.

GCs need their own proof, usually a certificate naming them as additional insured. See certificates of insurance.

Our online GL quote uses $1M per occurrence and $2M aggregate. A $2M aggregate meets the CSLB minimum for any LLC with 15 or fewer people on its personnel of record.

If your LLC lists more than 15 people, or a contract calls for higher limits, call or text a licensed agent at (877) 940-4313. Mention that the licence is an LLC and how many people are listed, and the agent will build the quote to fit. Coverage starts only after you sign the final quote.

Also useful: what drives GL cost and insurance by trade.