Are you looking to become a licensed general contractor in California? As a general contractor, you will be responsible for overseeing and managing construction projects, and a license is required to legally perform this work in California.
This article will cover everything you need to know about obtaining a general contractor license in CA, including the requirements, application process, costs, and renewal process.
In California, anyone who wants to work as a contractor must obtain a contractor’s license. The type of license needed depends on the specific nature of the contracting work. There are two main categories: general contractors and specialty contractors. General contractors handle a wide range of construction projects, while specialty contractors focus on specific trades or areas, such as plumbing, electrical work, landscaping, or painting.
For example, within the specialty contractor category, there are licenses for specific trades like HVAC (heating, ventilation, and air conditioning), roofing, flooring, and more.
A license is required by law to ensure contractors have the necessary skills and knowledge to perform quality work and protect consumers. Without a CA contractor’s license, contractors risk being fined and penalized by the state and may be barred from legally operating their businesses.
Without a valid California contractor’s license, contractors may face legal penalties, fines, or even jail time for performing construction work. In addition to the legal requirements, a California contractor license can also provide credibility and trustworthiness in the eyes of potential clients.
A license can demonstrate that the contractor has met the necessary qualifications and has the knowledge and experience to perform quality work.
If you aspire to become a licensed general contractor in California, you must familiarize yourself with the requirements. We’ve compiled a list of qualifications you’d need to get a general contractor’s license in California:
Note that the education and experience requirements vary based on the specific type of contractor license you are applying for. Let’s take a look at those, as well.
In California, there are three different types of contractor licenses: Class A, Class B, and Class C.
Here’s a brief overview of each license type:
This license allows contractors to work on projects worth $500,000 or more, including labor and materials. Class A contractors can work on various projects, including commercial and residential buildings, highways, and bridges. To qualify for a Class A license, you must have at least four years of experience in the construction industry and at least 32 hours of formal education on construction topics.
Class A contractors are authorized to take on general engineering projects. This classification includes the construction, alteration, and repair of fixed works requiring specialized engineering knowledge and skill, such as waterways, power plants, airports, and more. Class A contractors can also work on projects involving framing, excavation, and other general engineering-related tasks.
This license allows contractors to work on projects with a total value of $10,000 or more, including labor and materials. Class B contractors can work on most construction projects, but their scope is generally limited to a single trade or a group of related trades. To qualify for a Class B license, you must have a minimum of four years of experience in the construction industry and at least 16 hours of formal education on construction topics.
Class B contractors can specialize in general building construction or individual trades, such as building residential, commercial, and industrial projects. They may also coordinate subcontractors and perform tasks like framing, roofing, plumbing, electrical work, and more. Additionally, Class B contractors can focus on specific trades such as plumbing, electrical, HVAC, and other specialized areas within the construction industry.
This license allows contractors to work on projects valuing less than $10,000, including labor and materials. Class C contractors are typically limited to working on small projects like home repairs or minor renovations. There are no formal education requirements for a Class C license, but you must still have a minimum of four years of experience in the construction industry.
Class C contractors can fall under approximately 45 specialized trade classifications, including landscaping, insulation, drywall, painting, flooring, and more.
Obtaining a general contractor license in California involves a comprehensive process that ensures contractors meet the necessary qualifications and requirements.
From gaining relevant experience and education to passing exams and submitting applications, here is our detailed breakdown:
The first step is determining which license class you want to apply for. The California Contractors State License Board (CSLB) offers 44 classifications for general contractor licenses, ranging from general engineering contractors to specialty trades contractors. Each category has its own requirements for experience and education, so choose the right one based on the type of work you intend to do.
To be eligible for a general contractor license in California, you must be 18 years old, have a valid Social Security number or Individual Taxpayer Identification Number, and have at least four years of journey-level experience in your chosen classification. Journey-level experience is defined as full-time experience in the trade, either as a journey-level worker, foreman, supervisor, or contractor.
To protect consumers against any financial loss from your work as a contractor, you must obtain a surety bond or cash deposit.
A surety bond or cash deposit is a financial requirement imposed by the California Contractors State License Board (CSLB) as part of the licensing process for contractors in the state. It is a form of financial security that contractors must provide to protect consumers and ensure compliance with contractual obligations.
A surety bond is a contract between three parties: the contractor (principal), the surety company (guarantor), and the entity requiring the bond (obligee), which is usually the CSLB. The surety bond guarantees that the contractor will fulfill their contractual obligations, including completing the work according to specifications, complying with regulations, and addressing any potential financial damages resulting from the contractor’s actions or non-compliance.
In case of a valid claim, the surety company will compensate the harmed party up to the bond amount, and the contractor is then responsible for reimbursing the surety. The bond amount varies based on your classification, ranging from $15,000 to $25,000. The bond must be obtained from a surety company licensed in California.
Once you have determined your classification and met the eligibility requirements, you can submit your application online or by mail. You will need to provide personal and business information, as well as documentation of your work experience and education. The California Contractors State License Board (CSLB) will review your application and notify you if additional information is needed.
To pass the licensing exam in California, applicants must complete two parts: a business and law exam and a trade exam specific to their chosen classification. The business and law exam covers business practices, labor laws, contracts, and regulations relevant to the construction industry. The trade exam assesses the technical knowledge and proficiency in the specific trade, such as plumbing, electrical work, or carpentry.
According to the information provided by California Contractors Licensing, the exams are administered by a third-party testing agency, PSI Exams. Applicants typically take the exams at designated testing centers. The business and law exam consists of multiple-choice questions designed to evaluate the understanding of legal and administrative aspects of contracting. The trade exam assesses the applicant’s knowledge through multiple-choice questions and practical, hands-on sections.
It’s advisable for individuals preparing for the licensing exam to refer to the official resources provided by the Contractors State License Board (CSLB) and the testing agency for the most accurate and up-to-date information.
To ensure that you do not have any criminal history that would disqualify you from obtaining a license, you must get fingerprinted and undergo a background check. The CSLB will provide you with instructions on getting fingerprinted, which typically involves visiting a Live Scan center and paying a fee.
After you have passed the licensing exam and completed the fingerprinting and background check, you must pay the licensing fee. The fee varies based on your classification and ranges from $200 to $500.
Liability insurance and workers’ compensation insurance are required for all licensed contractors in California.
Liability insurance protects contractors and their clients against accidents or damages on the job. It provides financial coverage for property damage, bodily injury, or other liabilities arising from the contractor’s work. For example, if a contractor accidentally damages a client’s property during a construction project, liability insurance can help cover the costs of repairs or replacements. It also safeguards contractors from potential lawsuits resulting from accidents or negligence.
Workers’ compensation insurance is designed to provide benefits to employees in the event of work-related injuries or illnesses. It protects employees by providing medical expenses, wage replacement, and other related benefits if they suffer injuries or become ill while performing job duties.
Workers’ compensation insurance is intended to ensure that employees receive the necessary medical care and financial support while protecting employers from potential lawsuits related to workplace injuries. You must provide proof of liability and workers’ compensation insurance to the CSLB before your license can be issued.
If you meet the requirements mentioned above, the CSLB will approve your contractor’s license. Your license will be valid for two years and must be renewed before it expires. You must also comply with all laws and regulations governing the construction industry in California, including obtaining permits and inspections for all work performed.
The cost to obtain a California general contractor license can vary depending on several factors, including the classification of the license and the specific fees associated with each step of the application process. Here is a breakdown of the typical costs you can expect:
Insurance costs can vary depending on the size of your business and the type of work you perform, but the cost ranges between hundreds to thousands annually. While it is challenging to provide an exact figure without specific details, it is possible to provide a general range to give you an idea.
For smaller businesses or sole contractors, liability insurance costs can typically range from a few hundred to a few thousand dollars per year. The exact cost within this range depends on factors such as the level of coverage required, the scope of your operations, the location of your business, and your claims history.
For larger businesses with more extensive operations, the cost of insurance tends to increase. Such businesses may require higher coverage limits, have larger annual revenues, or engage in higher-risk activities, leading to higher insurance premiums. In such cases, insurance costs can range from several thousand to tens of thousands per year.
Obtaining a general contractor license in California is a process that can take several months or up to a year, depending on several factors. To get started, you must determine your eligibility and the license type you want to apply for.
Once you have determined your eligibility, you must obtain a surety bond or cash deposit, which typically takes a few days to a week. After that, you will need to submit your application to the California Contractors State License Board (CSLB). The CSLB reviews applications in the order they are received and typically takes four to six weeks to process an application.
If your application is approved, you must pass a licensing exam, which is typically scheduled two to four weeks after your application is approved. The exam may take several weeks to prepare for. If you have passed the exam, you must get fingerprinted and undergo a background check, which can take several days to a week.
You will also need to obtain liability insurance and workers’ compensation insurance, which can take several weeks to several months, depending on the size of your business and the type of work you perform.
If you are a sole contractor operating your business without any employees, the timeline for obtaining liability insurance and workers’ compensation insurance can be relatively shorter compared to larger companies with employees. As a sole contractor, you may only need to focus on obtaining liability insurance, which typically covers damages or injuries that may occur during your work.
The process of obtaining liability insurance can vary depending on the insurance provider and your specific needs. It typically involves researching and comparing insurance options, obtaining quotes, and completing the necessary paperwork. The timeline for getting liability insurance can range from a few days to a few weeks, depending on the complexity of your business operations and the specific requirements of the insurance provider.
Finally, once you have completed all the steps and requirements, you will receive your General Contractor License from the CSLB. The processing time for issuing licenses can vary depending on the backlog of applications and other factors, but it typically takes several weeks to several months.
In California, contractor licenses must be renewed every two years. Here are the steps to renew your contractor license in California:
Obtaining a general contractor license in California is a necessary legal requirement for anyone who wants to work in the construction industry. Research the requirements and steps involved in obtaining a license, such as education, experience, and bond or cash deposit.
Getting a general contractor’s license can not only protect contractors from legal penalties and fines but also serve as a powerful tool to showcase credibility, trustworthiness, and expertise to potential clients.