Starting a construction business is no easy task. First you have to pass the CSLB tests, complete the state filing applications, and then you have to figure out what kinds of Business Insurance are necessary for your new construction business. Well, we are here to take some of that burden off your shoulders. Below are some tips to get you started with your newly founded construction business.

Insurance for Starting a New Construction Business – Bonds

One of the first requirements you will need to fulfill once you pass your test is obtaining a $12,500 license & permit bond. This bond can vary substianally in pricing
depending on your credit history. If you have bad credit and are working towards obtaining your contractor’s license, it may be worthwhile to work on getting your credit issues resolved prior to purchasing a bond as it could save you over a thousand dollars every year. If fixing your credit is not an option on short notice, there are other alternatives. Most bond carriers have options to obtain a cosigner on the bond for a substantially reduced premium rate. You can save several hundred dollars by going this route.

Insurance for Starting a New Construction Business – General Liability

As a licensed contractor, having General Liability is not required, however, we cannot stress the importance of this coverage enough. If you damage someone’s property or cause bodily injury to a third party, it is the General Liability that will provide coverage. When shopping for General Liability, look for an A rated carrier that includes a blanket additional insured endorsement. Purchasing a policy with a blanket additional insured endorsement can save you hundreds of dollars over the year when you
get asked to provide certificates of liability insurance from general contractors or property owners.

Insurance for Starting a New Construction Business – Workers Comp

Depending on the type of contractor’s license you obtain, you may be required to carry Workers Comp for your business, even if you do not have employees. Workers Comp for construction businesses can be very pricey, especially if rated incorrectly. It is absolutely imperative you get an accurate quote based on a conservative payroll estimate and with the correct class code.

If you are not sure how to get properly rated or if you have questions regarding your current policy, let us know! We are eager to assist you with your new business!
You can call our contractor specialist at 925-297-4829.

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All information is general in nature and is intended to provide guidance only. It is up to you to request specific coverage options, the agency and agent do not bear this responsibility. Always read the policy if there is a questions about coverage or a claim. If any information herein should conflict with your actual policy’s specific language, the policy language will be controlling.