Business & LicensingQuestion 514 of 690
A licensed limited liability company (LLC) contractor in California is required to carry a separate liability insurance policy intended to compensate employees and workers injured by the LLC's actions. What is the minimum aggregate amount of this policy?
a.$50,000
b.$1,000,000 (plus $100,000 per additional employee beyond five, up to $5,000,000)
c.$250,000 flat regardless of payroll
d.$10,000 per employee
Explanation
Under B&P §7071.19 (referenced in §7065.1 licensing rules for LLCs), an LLC contractor must maintain liability insurance with an aggregate of at least $1,000,000 for licensees with five or fewer staff, plus $100,000 per additional employee, up to a $5,000,000 cap. This is in addition to the LLC's $100,000 employee/worker bond.
Law Reference: Bus. & Prof. Code §7065.1Practice all 690 questions free — no signup required.
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