Business & LicensingQuestion 625 of 1605
An LLC seeking a contractor's license in California must maintain a separate Liability Insurance policy with aggregate limits of at least:
a.$2,000,000 in all cases, regardless of personnel
b.$1,000,000 for licensees with 5 or fewer persons listed, plus an additional $100,000 for each additional person up to a maximum of $5,000,000
c.$250,000 if the LLC also posts a $100,000 LLC employee/worker bond
d.$500,000
Explanation
Bus. & Prof. Code §7071.19 (sometimes cited with §7071.9) requires an LLC contractor to maintain liability insurance with an aggregate of at least $1,000,000 for LLCs with five or fewer listed persons, plus $100,000 for each additional listed person, up to a maximum aggregate of $5,000,000. This is separate from and in addition to the $100,000 LLC Employee/Worker Bond required by §7071.6.5. Option A understates the requirement, C overstates a fixed amount, and D conflates the bond with the insurance — both are required, not substitutes.
Law Reference: Bus. & Prof. Code §7071.9Practice all 1605 questions free — no signup required.
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Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)