The CSLB LLC insurance requirement
If your contractor licence is held by an LLC, liability insurance is not optional. California law sets a minimum limit based on how many people are on your licence. Here is how it works.
What B&P Code §7071.19 requires
Since 1/1/2014, every LLC holding a CSLB licence must carry liability insurance. The minimum is an aggregate limit, meaning the most the policy pays in total during the policy period.
- 5 or fewer people on the licence's personnel of record: at least $1,000,000 aggregate.
- Each additional person: add $100,000.
- Cap: the requirement never goes above $5,000,000.
The personnel of record is the list of people CSLB has on file for your licence. Count everyone on that list, not your crew size or payroll.
| People on personnel of record | Minimum aggregate limit |
|---|---|
| 1 to 5 | $1,000,000 |
| 6 | $1,100,000 |
| 7 | $1,200,000 |
| 8 | $1,300,000 |
| 9 | $1,400,000 |
| 10 | $1,500,000 |
| 45 or more | $5,000,000 (the cap) |
The formula past 5 people: $1,000,000 plus $100,000 times (people listed minus 5). At 45 people the formula reaches $5,000,000, and it stays there no matter how many more are added.
Who can write the policy
The law also limits who the insurer can be. It must be either:
- an insurance company admitted in California, or
- an eligible surplus line insurer.
Both are legal for an LLC licence. The difference is how the company is regulated in California, not whether the policy counts. When you get a quote, the licensed agent can tell you which kind it is.
The requirement is about liability insurance for injury and damage to other people. It does not replace workers' comp. Every licensee, LLC or not, still files a workers' comp certificate or an exemption with CSLB, and some classes must carry workers' comp even with no employees. See California contractor workers' comp and 2028.
The bonds an LLC carries too
Insurance is only one of three things an LLC licence needs. On top of the liability policy:
- $25,000 contractor license bond (B&P §7071.6). Every licensee carries this one, LLC or not. It was raised from $15,000 effective 1/1/2023.
- $100,000 worker bond (B&P §7071.6.5). This one is for LLCs only. It is a surety bond that backs the wages owed to your workers.
A bond is not insurance. It protects the public and your workers, and if the surety pays a claim, it comes back to you for the money. Read contractor license bond vs insurance for the full difference. We handle bonds by phone at (877) 940-4313.
How CSLB gets proof, and what happens if it lapses
You do not mail CSLB a copy of your policy. The insurance company files proof with CSLB. When the policy is in place, ask the agent to confirm the filing is done.
If the coverage lapses or drops below the minimum, the licence can be suspended. A suspended licence puts every job and contract at risk, so renew before the policy ends and keep the limits at or above what your personnel count requires.
Your GCs need their own proof. That is a certificate of insurance, often with them named as additional insured. See certificates of insurance for contractors.
Mistakes that put an LLC licence at risk
- Counting the crew instead of the personnel of record. The minimum follows the people CSLB lists on your licence. A 3-person crew with 8 people on the personnel of record needs at least $1,300,000 aggregate.
- Adding a member or officer and forgetting the policy. Each person added past 5 raises the minimum by $100,000. Check your limits whenever the personnel of record changes.
- Reading the per-occurrence limit. The law sets the aggregate. Look at the aggregate line on your policy, not only the per-occurrence line.
- Thinking the bond covers it. The $25,000 license bond and the $100,000 worker bond do not count toward the insurance requirement. They are separate.
- Letting the renewal slide. A policy that ends without a replacement leaves the LLC below the minimum, and the licence can be suspended.
A quick check each year: open your licence on the CSLB site, count the personnel of record, run the formula, and compare it to the aggregate on your policy.
Do our online quotes meet the LLC minimum?
Online quotes use limits of $1M per occurrence and $2M aggregate. The $2M aggregate meets the CSLB minimum for an LLC with up to 15 people on the personnel of record.
If your LLC has more people listed, or a contract asks for more, call or text a licensed agent at (877) 940-4313 for higher limits. Tell the agent your licence is an LLC and how many people are on the personnel of record, so the quote is built to fit.
Nothing is bound until you sign the final quote. Related reading: what drives GL cost in California and contractor insurance by trade.
Common questions
Does an LLC contractor in California need liability insurance?
Yes. Under B&P Code §7071.19, every LLC holding a CSLB licence must carry liability insurance, in effect since 1/1/2014.
How much liability insurance does a CSLB LLC need?
At least $1,000,000 aggregate if 5 or fewer people are on the personnel of record, plus $100,000 for each additional person, up to $5,000,000.
What is the most CSLB requires for an LLC?
$5,000,000 aggregate. The formula reaches that cap at 45 people on the personnel of record.
Can a surplus line insurer meet the CSLB LLC requirement?
Yes, if it is an eligible surplus line insurer. A California-admitted insurer also qualifies.
Does an LLC still need a contractor license bond?
Yes. An LLC carries the $25,000 contractor license bond like every licensee, plus a $100,000 worker bond.
What happens if my LLC's insurance lapses?
The licence can be suspended. Renew before the policy ends and keep the limits at or above the minimum for your personnel count.
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.