CALIFORNIA INSURANCE DISCLOSURES
California Home Improvement Contract Insurance Disclosures
California home improvement contracts use separate notices for commercial general liability insurance and workers' compensation insurance. The contract workflow needs the contractor's actual insurance status — not a default answer copied from an old agreement.
Last reviewed: September 27, 2026
What §7159 requires for insurance notices
B&P §7159(e)(1) requires a notice concerning Commercial General Liability Insurance, and §7159(e)(2) requires a separate notice concerning Workers' Compensation Insurance.
Each notice should reflect the contractor's current, applicable status. The notice can sit inside the contract form itself, or — when the statute's attachment method is used — travel as an attachment that the contract expressly points to.
These are two separate notice decisions. A contractor's CGL status does not answer the workers' compensation question, and workers' compensation status does not answer the CGL question.
Commercial General Liability Insurance notice
The CGL notice identifies which insurance-status statement applies to the contractor.
Carries CGL coverage
The contractor reports that it carries commercial general liability insurance and identifies the insurer/contact information used for verification.
Does not carry CGL coverage
The contractor reports that it does not carry commercial general liability insurance.
Self-insured
The contractor reports a self-insured status when that is the relevant and correct status.
LLC liability insurance or security
A contractor licensed as an LLC uses the status path that reflects the liability insurance or other qualifying security required for that entity.
Pick the status that's actually relevant and correct today. An insured option that appeared on a prior contract isn't a reason to pick it again.
CGL disclosure is not the same as a universal CGL requirement
CSLB explains that commercial general liability insurance is not a universal requirement for every contractor license entity, even though the home improvement contract still addresses the contractor's CGL status.
Entity type matters here. Contractors licensed as limited liability companies carry their own liability-insurance or security obligations, so the right CGL answer depends on how the business is licensed and what it actually maintains.
The contract notice reports the contractor's actual status; it does not create coverage.
Workers' Compensation Insurance notice
Carries workers' compensation insurance
Use the contract status that reflects workers' compensation coverage for employees when that is the contractor's current situation.
No employees and exempt
Use the exemption status only when the contractor has no employees and is actually eligible for the workers' compensation exemption.
Having no employees is not, by itself, enough to assume the exemption is available.
Some license classifications cannot use the no-employees exemption
CSLB currently identifies active C-8 Concrete, C-20 HVAC, C-22 Asbestos Abatement, C-39 Roofing, and C-61/D-49 Tree Service contractor classifications as requiring workers' compensation insurance or valid self-insurance even when they have no employees.
CSLB also states that a license qualified by a Responsible Managing Employee (RME) cannot file the no-employees workers' compensation exemption.
Before selecting the contract's workers' compensation status, check exemption eligibility against the contractor's current license facts.
Contract body or attachment: keep the notice connected to the agreement
Under §7159, either insurance notice may be delivered as an attachment, but only when the contract contains the corresponding statement pointing the reader to it.
An attachment is not a disconnected handout. The contract itself needs to identify that the applicable insurance notice is attached when the attachment method is used.
Contract body
The applicable insurance notice printed in the agreement itself.
Attachment
When the notice goes out as an attachment, the agreement still has to say so.
Final package
Contract and any attached insurance notices reach the customer together, as one signing package.
Verify insurance status before the contract goes out
CSLB publishes current license information, including insurance information on file. When the notice relies on active insurance, the listed carrier and contact details give the contractor a way to confirm the status before the agreement is sent.
Check current contractor and insurance information on CSLB ↗
Work from the current license record and available insurance information, not a certificate or contract carried over from an older job.
Verification reduces stale-data errors, but it does not guarantee that a policy covers a particular claim, project, person or loss.
CGL, workers' compensation and contractor bonds are different
Insurance notices and bond information answer different questions. Do not use one as proof of another.
Fictional insurance-status walkthrough
Fictional example — verify real status before use
- Contractor
- Example Remodeling Co. (fictional)
- CGL status
- Carries CGL coverage (fictional workflow selection)
- CGL verification
- [current insurer/contact information]
- Workers' compensation status
- Carries workers' compensation insurance (fictional workflow selection)
- Attachment method
- Not used in this fictional walkthrough
These values are fictional. A real contract should use the contractor's current insurance and exemption status, not these example selections.
1. Check status
Pull the current contractor record and today's insurance facts.
2. Select the applicable notices
Answer the CGL question and the workers' compensation question one at a time.
3. Review the package
Before signature, make sure the contract and any permitted attachments agree with each other.
Common insurance-disclosure mistakes to catch
Copied status from an old contract
Last year's insurance or exemption status gets copied forward without a fresh check.
CGL and workers' compensation treated as one field
A single insurance answer gets used for both notices, when each needs its own.
Insured option selected without verification
The contract says there's coverage, but nobody has checked the current insurer and contact details.
Exemption selected from employee count alone
The no-employees workers' compensation box gets ticked before anyone checks whether the license is eligible for that exemption.
Attachment not connected to the contract
The insurance notice is handed over on its own, and the contract never references it as an attachment.
Bond used as insurance proof
A contractor bond is mistaken for proof of CGL or workers' compensation coverage.
LLC status ignored
A generic CGL answer is used for an LLC without checking the liability-insurance/security rules that apply to it.
Pre-signature insurance disclosure checklist
- Confirm the contractor's current CGL status.
- Select the CGL notice status that is relevant and correct.
- Confirm the contractor's current workers' compensation status.
- If using a no-employees exemption, confirm the license is actually eligible for it.
- Check whether the contractor's classification or RME status affects workers' compensation exemption eligibility.
- Verify current insurer or coverage information when the notice relies on active insurance.
- Keep CGL, workers' compensation and bond information separate.
- If using an attachment, confirm the contract contains the required attachment reference.
- Review the complete contract and attachment package before signature.
- Review current law and project-specific requirements before relying on the final disclosure.
Related California contract guides
B&P §7159 statute guide
The statute the insurance notices come from.
Plans & specifications
How plans, specifications and other identified documents can join the contract package.
Contract requirements
The bigger picture of a California home improvement contract.
Contractor license information
The contractor identity and current CSLB record your disclosures depend on.
15-point contract checklist
A pre-signature pass over identity, scope, dates, payments, notices and signatures.
Contract template guide
Where insurance notices sit in the overall contract.
Annotated contract example
Required notices in a fictional contract walkthrough.
Down payment limit
Why blanket performance/payment bonds are a separate subject from ordinary insurance notices.
How ContractBuilderAI fits
In ContractBuilderAI, insurance-disclosure status sits in the same guided workflow as contractor identity, customer and project information, scope, materials, dates, payment stages, notices, review checkpoints, e-signature, change orders and the contract record. You still supply and confirm the status yourself.
ContractBuilderAI helps organize the workflow. The contractor remains responsible for confirming current insurance, exemption and bond information and for determining which requirements apply to the final agreement.
Primary sources
Building California contracts should not start from a blank page.
ContractBuilderAI is opening a California private beta on November 1, 2026 for licensed home improvement contractors.
Apply for the California beta →