Contractor license bond vs insurance in California
A bond and an insurance policy both attach to your CSLB licence, so people mix them up. They do opposite jobs. A bond protects other people from you. Insurance protects you.
The short answer
When a bond pays a claim, the surety company pays the person who was harmed, then comes back to you to pay it back. The bond is a promise, backed by the surety, that you will follow the rules. The money is still yours to owe.
When insurance pays a covered claim, the insurance company pays it for you. That is the point of the premium. You do not pay the claim back.
So a bond does not take the place of insurance, and insurance does not take the place of a bond. Most contractors need both.
One more difference: the bond amount is a ceiling set by law, and it is there for the public. Your insurance limits are chosen when you buy the policy, and they are there for you. A bigger bond does not make you safer. Higher insurance limits can.
Side by side
| What | Who needs it | Who it protects | Who pays in the end |
|---|---|---|---|
| $25,000 contractor license bond | Every CSLB licensee | Consumers and the state | You, through the surety |
| $100,000 worker bond | LLC licences | Your workers' wages | You, through the surety |
| General liability insurance | Required for LLCs; required by most GCs and contracts | You, against claims from others | The insurance company, for covered claims |
| Workers' comp insurance | Anyone with employees, plus five classes even with none | Your employees, and you | The insurance company, for covered claims |
Which one answers which problem
Two job-site examples make the difference clear.
- Your ladder falls and cracks a client's window, and a neighbor trips on your hose and breaks a wrist. That is injury and damage to other people. It is a general liability claim. The insurance company handles it under your policy, after your deductible.
- A homeowner says you broke the contracting rules and lost them money. That kind of complaint can go to your license bond. If the surety pays, it sends you the bill.
The people you work for ask about these differently. Homeowners see the bond on your CSLB licence and the insurance notice in your contract. GCs ask for a certificate of insurance and usually want to be named additional insured, often with primary and non-contributory wording and a waiver of subrogation. Being a certificate holder is not the same as being an additional insured. See certificates of insurance for contractors.
The bonds
- Contractor license bond, $25,000 (B&P §7071.6). Every licensee carries it, whether you are a sole owner, a partnership, a corporation or an LLC. It was raised from $15,000 effective 1/1/2023.
- Worker bond, $100,000 (B&P §7071.6.5). LLC licences only. It is a surety bond that backs wages owed to the LLC's workers. It sits on top of the $25,000 bond, not in place of it.
Bonds are handled by phone with a licensed agent, not online. Call or text (877) 940-4313.
General liability insurance
General liability covers bodily injury and property damage your work causes to other people, and completed operations if your policy includes it. It does not cover your own employees, your tools, your vehicles or the cost of redoing faulty work.
For most licensees, CSLB does not require GL by law but strongly recommends it. GCs, commercial owners and many homeowners require it in the contract. LLC licences are the exception: B&P §7071.19 requires at least $1,000,000 aggregate, more for larger LLCs. See the CSLB LLC insurance requirement.
Your contracts also have to say where you stand. Home improvement and service and repair contracts must include a Commercial General Liability Insurance notice with your insurer and its phone number, or state that you have no CGL. Single-family home builders must disclose in writing whether they carry CGL.
This is the part you can quote online. Enter your CSLB license number and see quotes from A-rated programs at $1M per occurrence and $2M aggregate.
Workers' comp insurance
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 workers' comp even with no employees. SB 216 would have required workers' comp for all licensees from 1/1/2026, and SB 1455 (2024) delayed that to 1/1/2028.
Workers' comp is quoted by phone. Read more: California contractor workers' comp and 2028, or find your trade in contractor insurance by trade.
Common questions
Is a contractor license bond the same as insurance?
No. A bond protects consumers and the state, and the surety comes back to you for any claim it pays. Insurance protects you and pays covered claims for you.
Do I need both a bond and insurance in California?
Every licensee needs the $25,000 license bond. General liability is required for LLCs and by most GCs and contracts. Workers' comp is required if you have employees or work in one of five specific classes.
How much is the CSLB contractor license bond amount?
The bond amount is $25,000 for every licensee, raised from $15,000 on 1/1/2023. LLCs also carry a $100,000 worker bond.
Who pays if someone makes a claim on my contractor bond?
The surety pays the valid claim first, then comes back to you to repay it. That is the main difference from insurance.
Can I get a contractor bond online with Aster?
No. Bonds, workers' comp, commercial auto and umbrella are handled by phone at (877) 940-4313. General liability can be quoted online from your 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 2026-10-09.