California general contractor license and insurance requirements

Getting your California general contractor license takes time and experience, but it can open the door to higher-paying projects across the state. According to the Economic Research Institute, licensed contractors in California earn a median salary of about $148,000 a year.

This guide explains what you need to know about getting licensed in the Golden State — including who needs a general contracting license, how to apply, education and experience requirements, costs and the types of insurance that can help protect your contracting business.

In this post, we’ll cover:

• What Is a California general contractor license?
• How to become a general contractor in California
• Step-by-step guide to getting your CA general contractor license
• Do I need insurance to get a California general contractor license?
• Contractor license renewal requirements
• Local California general contractor business license requirements
• How NEXT supports California general contractors

What is a California general contractor license?

A California general contractor license is a state-issued credential that allows you to legally manage construction projects and hire subcontractors in California. The California Contractors State License Board (CSLB) manages and issues the license to applicants who meet the state’s standards.

Who needs a general contractor license in California? 

Anyone who bids on or performs construction work valued at $500 or more in California — including labor and materials — must hold a California general contractor license. This rule applies whether you’re working on residential, commercial or public projects.

You’ll also need a license if you hire subcontractors, advertise contracting services, or run a construction business under your own name. Unlicensed work on projects over the $500 threshold can result in fines, penalties or loss of the right to collect payment for completed work.

What can you do with a California general contractor license?

With a California general contractor license, you can legally oversee and manage construction projects from start to finish. With your license, you can:

• Bid on residential, commercial, or public construction jobs
• Hire and supervise subcontractors to complete specialized tasks
• Coordinate multiple trades on larger or more complex projects
• Pull building permits from local agencies
• Sign contracts and manage project budgets
• Work directly with property owners on design and construction decisions

Your license helps you qualify for higher-value projects and build credibility with clients.

License classifications in California

California offers three different types of contractor license classifications. The first two allow you to serve as a general contractor in the construction industry:

• Class A General Engineering Contractor: For specialized engineering projects, such as irrigation, flood control, hydroelectric projects, railroads, streets and roads, playgrounds, and power and utility plants.
• Class B General Building Contractor: To manage construction projects involving structures to support and shelter people, animals or movable property, including home improvement, using two or more unrelated trades.
• Class C Specialty Contractor: For construction businesses involving specialized building trades or crafts such as services or testing fire extinguishing systems, installing carpet or flooring, or preparing or removing roadway construction zones or traffic diversion.

How to become a general contractor in California 

Deciding to start a general contracting business means committing to staying educated in the trade and gaining many years of experience. While most states require a general contractor license, California is particularly stringent. No need to worry, though, as we’ll explain the process step by step.

California general contractor license requirements

California’s general contractor license requirements are standardized state-wide. To qualify for licensure, you must meet several requirements set by the CSLB:

• Age and identification: You must be at least 18 years old and have a valid Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).
• Experience: You need at least four years of journey-level experience (as a journeyman, foreman, supervisor, or contractor) within the last 10 years
• Exam: You must pass two exams — one on construction law and business, and one trade-specific exam that covers your classification.
• Application and fees: Submit a completed application and pay the required fees. In 2025, the original application fee is $450 and the initial license fee is $200.
• Background check: Provide fingerprints and pass a criminal background review through the Department of Justice and FBI.
• Contractor bond: File a $25,000 contractor license bond or cash deposit as required by the CSLB.
• Business insurance: If you have employees (or if you offer certain specialities like HVAC or concrete services) you must show proof of CA workers’ compensation insurance.

Experience and education qualifications

The CSLB focuses on verified work experience, but education and training can also help you meet the licensing requirements:

• Qualifying experience: You must have at least four years of journey-level work experience in the classification you’re applying to. Applicants can count time spent working as a journeyman, foreman, supervisor, subcontractor or owner-builder.
• Apprenticeships: Completing an approved apprenticeship program can count toward your four years of required experience.
• Education credit: Technical school, trade school or college courses in construction management or a related field may replace up to three years of experience.
• Military experience: Military construction or engineering experience can also qualify toward licensing requirements.
• References: The CSLB may ask for certifications or projects you’ve worked on. They may also ask for a client, supervisor or colleague to verify your experience.

There are no specific educational requirements, although you may submit technical school or college credit for a portion of the work experience requirement.

How much does it cost to get a CA general contractor license?

You will need to pay a series of fees, including but not limited to a $450 license application fee and a $200 initial license fee. 

You will also need to post a $25,000 contractor license bond or cash deposit.

How long does it take to get a California general contractor license?

Timing varies by application volume. Generally it takes between two to three weeks for processing. You can check CSLB’s processing times page for more information.

Fortunately, when you take the exam, you will know your results before leaving the testing center. It should take less than two weeks to receive your wall certificate and pocket license card.

Once your application is approved, the next step is taking — and passing — the required exams. Here’s what to expect on test day and how to prepare.

Passing the contractor licensing exams

One of the biggest challenges in getting your California general contractor license is passing the exams. The CSLB has contracted with PSI Exams to administer the examinations. PSI examination centers are located across California.

After CSLB approves your application, you’ll schedule and pay PSI directly for each exam

You’ll need to pass two separate exams:

• Law and Business Exam: Covers topics like business management, construction law, safety, contracts, liens, employment requirements and estimating and bidding.
• Trade Exam: Focuses on the specific classification you’re applying for (such as General Building or General Engineering). It tests construction methods, materials and code requirements relevant to your trade.

Each exam is computer-based and consists of multiple-choice questions (100 to 125 questions) and is closed-book. You’ll receive your results immediately after finishing the exam at the testing site — you’ll see whether you passed or failed.

Many general contractors prepare by using the CSLB study guides, but you can also find approved prep schools, technical schools and online courses to help you prepare. Just make sure the materials are updated with the current exam outlines.

Step-by-step guide to getting your CA general contractor license

Here’s how to get your California general contractor license from start to finish:

1. Meet eligibility requirements. You must be at least 18 years old and have a valid Social Security number or Individual Taxpayer Identification Number. You also need to have at least four years of qualifying construction experience within the last 10 years.
2. Submit your application and pay fees. Complete the license application on CSLB’s website. Include your work history, required documentation and pay the application fee (currently $450). The CSLB will review your application, and if accepted, will send you a notice to sit for the examinations.
3. Pass the licensing exam. You’ll need to pass two exams: one on business and law, and one on your specific trade classification (such as General Building or General Engineering). The CSLB provides study materials and sample questions online to help you prepare.
4. Complete fingerprinting and background check. After your application is approved, you’ll also receive instructions for fingerprinting through Live Scan. The Department of Justice and FBI will review your background before your license is issued.
5. Post your contractor license bond. After you pass your exam, the CSLB will request additional documentation for final approval. California requires a $25,000 contractor license bond or equivalent cash deposit.
6. Provide proof of required insurance coverage. If you have employees — or if you work in concrete, roofing, HVAC, asbestos abatement or tree service — you must show proof of workers’ compensation insurance. Many contractors also choose to carry general liability insurance to help cover property damage or injury claims.
7. Receive your license and start working. Once you’ve passed your exams and submitted all documentation, you’ll get a certificate and license card. You can then legally bid on and manage construction projects throughout California.

Following these steps will help you meet all California general contractor license requirements and start working legally across the state.

Can I get a California contractor license with out-of-state experience?

California has reciprocity requirements if you have a general contractor license from Arizona, Louisiana, Nevada and North Carolina. First, your license must match the state’s Reciprocal Classification List. Generally, you must also have held an active license in good standing for at least five years.

You can submit a verification request to validate your license and complete the application if you meet the criteria. The process is typically faster than applying for an initial general contractor license because the CSLB offers a trade exam waiver as part of its reciprocity guidelines.

Do I need insurance to get a California general contractor license?

The most popular type of general contractor insurance is usually a combination of general liability, worker’s comp and commercial auto insurance. However, you may need other types of California business insurance depending on the services you offer.

General Liability insurance

California general liability insurance helps cover third-party bodily injury and property damage, as well as libel, slander and defamation.

Whether a client trips over your toolbox, you drop your hammer and dent a customer’s floor, or you say something disparaging about your biggest competitor, general liability can help protect you from financial risk.

Learn more about general liability for contractors.

Workers’ Compensation insurance

Workers’ compensation insurance is required if you have employees, as well as for all concrete, HVAC, asbestos abatement, tree service or roofing contractors in California. This coverage will protect you and your employees if there is an on-the-job injury or illness.

Note: By January 1, 2026, all active California contractor license holders will be required to carry workers’ compensation insurance — even if they don’t have employees. This change — the second phase of California Senate Bill 216 — aims to ensure every licensed contractor has coverage in place for potential job-related injuries.

Learn more about Workers’ Comp for construction workers.

Tools and Equipment insurance

The tools and equipment you need to complete contractor jobs can be costly. Tools and equipment insurance can protect your gear by paying for repairs and replacement if damaged or stolen. At NEXT, this is an add-on to a general liability policy.

Commercial Property insurance

If your contracting business owns or rents property, commercial property insurance in California protects the physical assets of a business, such as inventory, fixtures, furniture, building structures and other business property.

Commercial Auto insurance

Business use of a vehicle is not typically covered by personal auto insurance. Any vehicles owned by your company should be covered by a commercial auto insurance policy.

Depending on the specifics of your policy, commercial auto insurance may include bodily injury and property damage to someone else, personal injury to you or your employees, collision damage to the vehicle, and coverage for non-collision damage to the vehicle.

Contractor license renewal requirements

Active general contractor licenses in California expire every two years. You’ll get a renewal application about two months before your license expires. After submitting the form and paying the $450 renewal fee, you can check your license status online to track its progress.

Keep in mind that the business name on your license renewal must match the CSLB’s records and the name on file with the Secretary of State.

Local California general contractor business license requirements

In addition to statewide rules, many California cities have their own licensing and insurance requirements for contractors.

Los Angeles

Before launching your general contractor business in Los Angeles, you’ve got to have a Business Tax Registration Certificate. It’s a rule under Section 21.188, and the Los Angeles Office of Finance ensures everyone’s playing by the book by checking construction sites.

Part of the process involves filling out and submitting a list of your subcontractors, which helps speed up the review.

In Los Angeles, contractors are subject to specific insurance mandates. For commercial projects, you need to have a minimum general liability limit of $1 million per occurrence and $2 million in total. And the City of Los Angeles should be listed as the certificate holder and additional Insured.

For residential projects, the minimum personal liability limit is $300,000. You’ll need to show proof of this insurance by uploading it to KwikComply, the city’s insurance risk management system.

Lastly, LA is a mixed bag. It’s got high-rise buildings, complex infrastructure projects, and a variety of commercial and residential work. But it’s also got its share of high crime rates, earthquakes, wildfires and mudslides. So, when researching general contractor insurance coverage in LA, consider these important factors.

San Diego

Thinking of opening up shop in San Diego? You’ll need a Business Tax Certificate, which functions as a business license and shows you’ve paid your business taxes. But remember, this certificate doesn’t replace any other permits or licenses you might need under state or local law.

If you contract with the Housing Commission in San Diego, expect contract-specific insurance and endorsements (e.g., additional insured, waiver of subrogation). Requirements vary by contract. This includes:

• General liability insurance with a minimum of $1,000,000 per occurrence and aggregate
• Professional liability coverage of $1,000,000 per occurrence and aggregate
• Automobile insurance of $500,000
• Workers’ compensation and employer’s liability coverage of $1,000,000

San Jose

If San Jose is where you’ll be based, you’ve got to get a Business Tax Certificate within 90 days of starting your operations. But keep in mind, this certificate doesn’t mean you’ve met all the other permits or licenses you might need from the city, county, state or federal government.

San Francisco

General contractors operating in San Francisco are required to have a valid San Francisco Business License. Alternatively, contractors can present a temporary Business Tax Certificate in place of the business license.

In San Francisco, contractors must adhere to specific city mandates beyond state requirements in 2023. The Minimum Compensation Ordinance sets rates at $21.54/hour for for-profits. Effective January 1, 2026 the rate increases to $23.00/hour for non-profits and $23.00/hour for public entities.

The Health Care Accountability Ordinance requires payments of $7.50/hour to San Francisco General Hospital, capped at $300/week. (This rate is adjusted for inflation annually on July 1.)

When it comes to insurance, it’s important to keep in mind that the city is located near two major earthquake faults (San Andreas and Hayward), making commercial earthquake insurance a wise precaution.

How NEXT supports California general contractors

NEXT is trusted by hundreds of thousands of small businesses, including California general contractors. You can learn more about the costs of general contractor insurance packages NEXT offers to business owners like you.

Our online services allow you to apply for coverage and receive your certificate of insurance in just minutes, even if you’re using your cell phone from a job site. You can share unlimited digital certificates for no additional charge, letting you easily submit proof of insurance whenever you need it.

Get your instant quote today.