The Real Cost of Contractor Insurance in California
Let's cut to what you actually want to know. A plumber in Anaheim running a two-person crew won't pay the same as a roofing contractor in Sacramento with fifteen employees. Insurance pricing is specific to your operation, but I can give you solid benchmarks to work with.
What California Contractors Actually Pay
Here are realistic annual premium ranges based on what we see every day:
| Coverage Type | Annual Premium Range | |--------------|---------------------| | General Liability | $500 - $3,500 | | Workers' Compensation | $1,200 - $15,000+ | | Commercial Auto | $1,200 - $4,500 | | Contractor's Bond | $100 - $500 | | Builder's Risk | $1,000 - $5,000 |
That workers' comp number jumps dramatically for roofers and demo crews. A framers' workers' comp bill can easily hit $20,000 or more depending on payroll size.
What Actually Drives Your Premium
Your Trade Makes the Biggest Difference
A flooring installer and a demolition contractor might both run $500,000 businesses, but their insurance costs will look nothing alike. Underwriters bucket trades by historical claim frequency and severity. Roofing sits near the top of that list. Office cleanups at the bottom.
Real example from last month: Two Orange County contractors with identical $400,000 revenues. The tile installer quoted at $1,800 for GL. The framing contractor came in at $4,200. Same carrier, same revenue, wildly different risk profiles.
Revenue and Payroll Set the Base
General liability typically rates off your gross receipts. Workers' comp rates off payroll. If you're growing, expect your premiums to grow too. The flip side is also true. When construction slowed down in 2020, a lot of contractors saw significant audit credits come back.
Claims History Follows You
Your experience modification rate tells insurers how your claims stack up against similar operations. It starts at 1.0 and moves from there. One bad injury can push you above 1.0 for three years, which means paying more than the base rate for every policy dollar.
I've seen contractors with 0.75 mods getting quotes 25% below their competitors. That's real money on a $50,000 policy.
Coverage Limits Cost More, Protect More
Most commercial work requires at least $1 million per occurrence and $2 million aggregate. That's table stakes. Larger projects or work for public agencies often want $5 million or more, which means adding an umbrella policy.
Practical Ways to Lower Your Costs
Bundle your policies. Putting GL, auto, and property with the same carrier typically saves 10-15%. That adds up.
Keep a clean safety record. It takes three years for your experience mod to improve, but it's the most sustainable way to cut workers' comp costs over time.
Raise your deductibles if you can afford some out-of-pocket exposure on smaller claims. Moving from a $500 deductible to $2,500 on a commercial auto policy might save you $400 a year.
Shop your coverage every couple of years, but don't switch carriers constantly. Long-term relationships with the same insurer can pay off when you have a claim and need flexibility.
Getting a Quote That Actually Means Something
Generic online quotes are nearly useless for contractors. To get real pricing, you'll need your contractor license number, estimated annual revenue, employee count with specific job duties, a description of your typical projects, and your claims history for the past five years.
We work with over 50 carriers to find competitive rates for California contractors. The process takes about 20 minutes on the phone, and we can usually get you quotes within 48 hours.
Common Questions
Can I get coverage with poor credit?
Yes, though your options narrow. We place contractors with credit challenges regularly through carriers that specialize in non-standard accounts.
Is contractor insurance a tax write-off?
Absolutely. Business insurance premiums are ordinary business expenses under IRS rules.
How often should I review my coverage?
Once a year at minimum. Anytime you hire, buy new equipment, or start offering new services, pick up the phone.