Are California Contractors Required to Have Liability Insurance?

You started your California contracting company because you're great at what you do, but navigating the legal requirements of the contracting business can be a headache.

While the State of California does not legally require contractors to have general liability insurance, not having it could cause you to lose out on job bids, be denied license applications, or even force you into bankruptcy if an accident happens and you can't afford to pay out of pocket.

By purchasing general liability insurance for your company, you can help protect your company in the event that someone else suffers an injury or property damage while on one of your job sites.

What Is General Liability Insurance?

Understanding what general liability insurance is and how it can help you is essential. General liability insurance is a type of insurance that can protect you from financial loss if you are found to be responsible for injuring someone or damaging someone's property.

General liability insurance could help protect you from claims that could otherwise result in costly legal fees, settlements, or other financial losses. In the event of a lawsuit, it can also help pay for your defense costs.

It's important to ensure you have the proper coverage in place to focus on what you do best — providing high-quality work for your clients.

Why Do California Contractors Need General Liability Insurance?

Accidents happen all the time, and you want to avoid being on the hook for thousands of dollars in medical bills, legal fees, or repair costs. This could include simple accidents like tripping over a toolbox and breaking an arm or wrist to larger accidents such as rupturing a water line and causing water damage to the property.

General liability insurance can help cover those expenses. So even though you might never need to use it, having general liability insurance can give you peace of mind knowing that you're financially protected if the worst happens on a job site.

Additionally, while California may not require you to have general liability insurance, home improvement contractors are required to disclose whether or not they carry liability insurance to their clients. Furthermore, your clients may ask for proof that you carry liability insurance in order to work with them.

What Does Contractor General Liability Insurance Cover?

Contractor general liability provides coverage for damages or injuries caused to clients, third-party individuals, businesses, or strangers during business operations. This coverage can help pay for the costs incurred due to accidents.

Contractor general liability insurance can help cover:

  • Bodily Injury
  • Property Damage
  • Completed Product Claims
  • Reputation Injury
  • Copyright Infringement

Other Types Of Insurance To Consider

In addition to general liability insurance, if you have employees you'll want to consider Workers' Compensation in the event of one of your employees having an accident or injury while on the job.

If you feel like this blog post has given you valuable insight into getting insured as a California contractor, take that next step and get a quote today. Aegis Insurance Markets can help you feel secure when taking on any kind of contractor job.




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