A California general contractor license is challenging to get, but the rewards can be well worth it. California general contractors earn a median salary of $140,903 per year, according to the Economic Research Institute.
Once you get your license, you’ll be set to start work in the Golden State on residential or commercial projects. Here’s what you should know about California general contractor licensing and insurance to get your business up and running.
In this post, we’ll cover:
- How to become a contractor in California
- What are the requirements to get a general contractor license in California?
- General contractor license types
- Common challenges for obtaining a license
- How much does it cost to get a CA general contractor license?
- How to get a general contractor license in California
- General contractor license renewal requirements
- General contractor license reciprocity in CA
- Insurance requirements for California general contractors
How to become a 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.
What are the requirements to get a general contractor license in California?
California’s general contractor license requirements are standardized state-wide. Qualifying individuals that can get a general contractor license must:
- Be 18 or older with a valid Social Security number or individual taxpayer identification number.
- Have had four years of qualifying experience (journey-level, foreman, supervisor or contractor) within the past 10 years.
- Pass a two-part exam through the California Contractors State Licensing Board (CSLB).
There are no specific educational requirements, although you may submit technical school or college credit for a portion of the work experience requirement. Apprenticeships and military experience may also qualify.
General contractor license types
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.
Common challenges for obtaining a license
The two biggest challenges for obtaining a California general contractor license are passing the exam and paying all the fees.
The exam is intentionally difficult, and you are unlikely to pass it without studying. Numerous general contractor license schools can help you prepare for the exam. While enrolling in a licensed contractor exam school can be a reasonable option, it’s crucial to check reviews to make sure you choose a strong program.
You can prepare on your own by studying the California general contractor license study guide offered by the Contractors State License Board.
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 contractor license bond or cash deposit. Effective January 1, 2023, the amount increases from $15,000 to $25,000.
How to get a general contractor license in California
Getting a general contractor license in California is a step-by-step process.
The first step is ensuring you meet all the requirements and then apply for the contractor license exam. Once your application is processed, you will receive instructions on submitting your fingerprints and taking the open-book Asbestos exam online.
After passing the exam, you will be notified of the next steps, including posting your surety bond or cash deposit. You must also submit proof of workers' compensation insurance if you have at least one employee or are applying as a concrete, HVAC, asbestos abatement, roofing, or tree service contractor whether or not you have employees.
How long does it take to get a general contractor license?
It can take about three weeks to be approved to take the licensing exam, and there is no way to speed up the process.
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.
General 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 licensure renewal must match the CSLB’s records and the name on file with the Secretary of State.
General contractor license reciprocity in CA
California has reciprocity requirements if you have a general contractor license from Arizona, Louisiana or Nevada. First, your license must match the state’s Reciprocal Classification List. 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.
Insurance requirements for California general contractors
The most popular type of business insurance in California is usually a combination of general liability, professional liability, and commercial auto insurance. Additionally, California requires businesses with employees to carry workers’ compensation insurance coverage.
The state of California has no additional general contractor insurance requirements. However, many businesses opt to purchase insurance coverage to lessen their financial risk. You’ll often find that many clients and projects also require proof of insurance before you can start work.
General Liability insurance
California general liability insurance helps covers 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.
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.
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.
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.
Commercial Property insurance
If your contracting business owns or rents property, commercial property insurance in California protects against liability for loss or damage that can happen.
How NEXT supports California general contractors
NEXT is trusted by 420,000 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.
Do you have projects in another U.S. state? Visit our summary of general contractor license requirements in every state.