Your California Contractors Insurance Expert in Agoura Hills

Zeyger Insurance insures many different types of contractors from Landscapers, Electricians, Carpenters, and many more!

There are many types of independent contractors who all need independent contractors liability insurance and other coverage to match their specific risks. Some of the professionals that need contractors insurance include:

  • Independent construction contractors
  • Plumbers, carpenters, electricians and painters
  • Repair people
  • House and carpet cleaners
  • Freelance writers, editors and graphic designers
  • Independent hair stylists, and salon professionals
  • Horse or dog trainers
  • and more…

Don’t underestimate
your risk

Getting the right independent contractors liability insurance in place can  protect you from lawsuits, mishaps and third party property damage that can devastate your business.

Normally, you will need a few different categories of coverage for complete liability protection:

  • General liability: The foundation of all contractor insurance coverage is a general liability policy. This coverage will provide two types of protection:
    • Bodily injury: Provides coverage if you or someone you employ causes injury or death to a third party during the course of work. It provides for medical care for the injured person and covers your legal defense if you are sued for damages.
    • Property damage: Provides coverage if you or one of your employees causes damage to property belonging to others. This includes the building or property you are working on or any third-party property.
  • Completed operations/product: Provides coverage in case a project you finished has an issue or causes damage. It can also extend to any products you sell or distribute.
  • Advertising personal injury: Covers the risk of damaging another’s reputation or causing a loss through slander, libel or false advertising claims.
  • Contract liability: This covers you in a contract dispute. It is not always included in general liability coverage so verify that you carry this coverage with your insurer.

The specific independent contractors liability insurance coverage you need will be unique to your business. By working with a Zeyger Insurance agent, you can ensure that you don’t have critical gaps in coverage that could leave you exposed to expensive legal claims.

Business Owners Package Insurance

Do you need a Business Owners policy?

The contractors general liability coverages can often be bundled with a few other coverages to create a business owners policy, or BOP.

This serves two purposes. It expands the policy to cover risks that small business owners face, and also typically results in a discount on the cost of your insurance.

Normally, this coverage will make sense for you if you have employees. A small business is basically defined as a business that has up to 100 employees and generates about $5 million or less in annual revenues.

Some of the additional coverages that can typically be bundled with a BOP include:

  • Property damage: This insurance covers your owned or rented property if it is damaged. This includes office buildings, storage facilities, warehouses, workshops, or garages. It does not cover commercial vehicles.
  • Business income: This protects you from loss of income if your business is interrupted due to a covered loss. It usually covers income and operating expenses for up to 12 months.
  • Commercial auto: Insures your cars, trucks, vans, specialized trucks or any vehicles used for business purposes.

Do You Need Workers Compensation Insurance?

As an independent contractor, you may or may not need to have workers compensation insurance Workers Compensation Insurance. Workers Compensation regulations are mandated state by state. If you are in business for yourself, and you do not have employees, you are most likely not required to buy workers comp. However, in some states you need to purchase workers comp even if you don’t employ others.

If you are a contractor who employs other workers, your state will most likely require you to carry this insurance. This policy protects workers from job-related illness, injury or death. It will also reimburse workers for lost wages if they cannot go back to work.

The benefit to you, as the employer, is that this coverage can help to prevent losses from employee lawsuits.

Workers Compensation Insurance
Business Owners Insurance

Should You Consider Professional Liability Coverage?

When you are looking for the right contractors insurance for your business, you will have many choices, including whether to buy professional liability insurance, also known as “errors and omission” insurance or “E & O.”

E & O is a liability policy that protects you if you make a mistake that causes a financial loss to a client. Similar to general liability, it will provide legal defense and claims settlements, if necessary.

You may want or need this coverage under the following circumstances:

  • You provide professional advice in your line of work. This can include everything from recommending a particular type of plumbing or wiring to providing interior design services.
  • You hire employees or subcontractors who provide any sort of advice or consulting services.
  • Your state requires you to have E & O insurance due to the work you perform.

If you utilize subcontractors, it is a good idea to make certain they are insured with professional liability as well, as they may not be covered by your policy.

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Contractors Insurance California FAQ

Operating as a contractor in the Golden State is a vibrant pursuit, but it comes with a bedrock of responsibility: Safeguarding your business. Just as you wouldn’t start a foundation without the right blueprint, running a contracting business in California without adequate insurance is an invitation to disaster. The stakes are incredibly high, from potential on-site injuries to property damage claims that can cripple even the most robust operations. California’s regulatory landscape for contractors is famously rigorous, and for good reason. It aims to protect consumers and workers alike, making comprehensive insurance not merely an option but a non-negotiable legal and ethical imperative. Imagine that a sudden storm floods a project site or an unexpected accident injures a team member; without the right coverage, your business could face devastating lawsuits and financial ruin. This guide is your essential roadmap to understanding contractors insurance in California. We’ll demystify the various types of coverage, shed light on legal requirements, and equip you with the knowledge to make informed decisions that protect your livelihood, employees, and reputation. Consider this your go-to resource for building a secure future for your contracting venture amidst California’s dynamic market.

Contractor insurance is mandatory in California primarily to protect consumers and workers from potential financial liabilities arising from construction-related incidents. The Contractors State License Board (CSLB) requires specific insurance types, like a contractor bond, for licensing and operating legally within the state. This regulatory framework ensures that, in the event of accidents, damages, or injuries, there are financial safeguards in place. It prevents contractors from being bankrupted by claims and assures clients that their projects are protected. It is important to note, though, that General Liability (GL) insurance is only a mandatory requirement for LLCs. However, it is strongly recommended for non-LLCs to have GL insurance, and it is often contractually required by clients.

Real Results: In 2023, a small California plumbing contractor accidentally caused property damage, which resulted in a $75,000 lawsuit. Because it carried the required license bond and maintained GL insurance, its insurer covered the costs, which prevented the business from going bankrupt.

Takeaway: Secure comprehensive coverage to comply with state law and protect your business from unforeseen financial burdens.

The primary purpose of general liability (GL) insurance for a California contractor is to protect the business from claims of third-party bodily injury, property damage, and personal and advertising injury. This coverage is crucial because it addresses common risks that are inherent in construction, such as a client tripping over tools on a job site or accidental damage to a client’s property. GL insurance helps cover legal defense costs, settlements, and judgments, preventing these incidents from devastating a contractor’s finances. It’s often required by clients before a project can even begin. It acts as a financial safety net for everyday operational risks.

Real Results: A Fresno roofing company’s GL policy paid over $20,000 in legal fees and settlement after a tile fell, which damaged a client’s vehicle. The company’s GL policy saved the business from direct financial strain.

Takeaway: General Liability is your front-line defense against common accidents and property damage claims on the job.

Workers’ compensation insurance in California protects your business by covering medical expenses and a portion of lost wages for employees who suffer work-related injuries or illnesses. This coverage shields your business from direct financial responsibility for these costs, which can be substantial, and also protects against potential lawsuits from injured employees. It ensures that your team members receive the necessary care and financial support during their recovery. California has enacted legislation (SB 216) that phases out the exemption of licensed contractors with no employees from being required to have workers’ compensation. On July 1, 2023, certain business classifications (C-8 Concrete, C-20 HVAC, C-22 Asbestos, C-39 Roofing, and D-49 Tree Service) were required to have Workers’ Compensation regardless of whether they have employees or not. This requirement was slated to include all licensed contractors, regardless of their employee status, by January 1, 2026. However, Senate Bill 1455 postponed this to January 1, 2028. 

Real Results: After an employee sustained a fall on a job site, a San Diego contractor’s workers’ compensation policy covered $35,000 in medical bills and lost wages, averting a major out-of-pocket expense.

Takeaway: If you have employees, Workers’ Compensation is legally required and financially vital for protecting both your workers and your business.

Beyond General Liability and Workers’ Compensation, California contractors should consider several other crucial insurance types to ensure comprehensive protection. Commercial Auto Insurance is vital for vehicles used for business purposes, covering accidents and related liabilities. Inland Marine insurance, often called “tools and equipment coverage,” protects your valuable gear from theft or damage at job sites or in transit. Professional Liability (Errors & Omissions) is important for design-build firms or consultants, covering negligence in professional services. Furthermore, a Commercial Property policy can cover your office or workshop and its contents.

Real Results: A Sacramento construction firm avoided a $50,000 loss when its commercial auto policy covered repairs and legal fees after a company truck was involved in an at-fault accident.

Takeaway: Expand your coverage beyond the basics to protect your vehicles, tools, professional advice, and property from specific business risks.

A commercial auto policy for a California contracting business specifically covers vehicles used for work-related purposes, including trucks, vans, and utility trailers. It typically provides coverage for bodily injury and property damage liability if your business vehicle causes an accident. Furthermore, it can include coverage for physical damage to your business vehicles, such as collision and comprehensive coverage for theft, vandalism, or natural disasters. This policy also often covers uninsured/underinsured motorist protection and medical payments for occupants. Personal auto policies almost always exclude business use, making commercial auto policies essential.

Real Results: A Bay Area carpenter’s commercial auto policy reimbursed him $15,000 when his work van, which was laden with tools, was stolen from a job site. This allowed him to replace the vehicle and continue working.

Takeaway: Ensure that all vehicles used for your business are covered by a commercial auto policy, as personal policies won’t suffice.