Additional Insured Endorsements for Contractors

Contractors can’t ignore the importance of financial protection, no matter what sector they work in. You will also be protected from lawsuits and damages if you have a contractor’s insurance policy.

Here’s how it works

The purpose of contractor insurance is to provide financial protection to your business if it is involved in an accident or a peril that causes financial loss. An insurance policy is an agreement between a firm/individual and an insurer. A specific premium amount will be charged as the price of insurance coverage, which you will receive from the insurer if damages occur. In essence, you’ll be able to choose what kinds of coverage you want to protect, which will depend on your preferences, budget, and needs. Depending on the terms outlined by the signed contract, financial coverage will be provided.

Contractors are sometimes required to show proof of insurance and enlist the client as additional insured on their commercial general liability policies. It is common for a certificate of insurance to accompany an endorsement as evidence of coverage.

An additional insured endorsement can be obtained by contractors

Aside from the requirements, restrictions and complexities that come with every insurance policy, getting an additional endorsement also has its own peculiarities.

As a first step, you need to define who you want to include in the endorsements. You can add an additional insured either as an individual or as an organization. Depending on the purpose of the additional endorsement, the wording may differ. It can be obtained for ongoing or completed operations.




A blanket additional insured endorsement, also called an automatic endorsement, allows for a contract to automatically include those entities and individuals as AIs.

Licensing requirements for contractors in California

Contractors must comply with laws specific to each state in the United States. Contractors State License Board (CLSB) of the Department of Consumer Affairs handles this responsibility in California. In addition to providing administrative services to contractors and clients, the board is responsible for investigating complaints.

Licensing requirements for California contractors

License requirements for becoming a contractor in California include:

–           Be at least 18 years of age

–           Be a U.S. citizen or legal resident

–           Provide passport photographs

–           Hold a $15,000 worth of bond

Is there a need for a license?

The CLSB requires licensing for any project (materials and labor) that costs $5,000 or more. It refers to the construction or modification of any structure, including buildings, roads, highways, parking lots, excavations, and railroads. All contractors and subcontractors, as well as anyone engaged in business, must comply with the regulation. Prior to submitting a bid for a job in this state, it is essential to fulfil this requirement.

Working without a license carries penalties

In California, operating as an unlicensed contractor is a criminal offense. Any offender can be prosecuted criminally or civilly. Contracting work for jobs worth $500 or more, or presenting yourself as a contractor for jobs worth that amount will result in legal or criminal action.


A fine of $500 and/or up to six months in jail is the most common punishment for this. A fine of $200 to $15,000 may also be imposed depending on the outcome of the investigation.


Following a second conviction, the fine could increase to 20% of the total project price, or $4,500. An offender in this category must serve a minimum of 90 days in jail.

To avoid a setback for your business, it is strongly recommended that you get the license. You may also lose sight of your long-term plans through the consequences.

In case I do not meet the eligibility requirements, what do I do?

A person captured on the CSLB’s records who meets the requirements for a license may qualify for a license if they do not meet the California licensing requirements for contractors.

Using my California Contractors License in another state is possible?

Nevada, Utah, and Arizona have reciprocal contractor license agreements with California. When working in any of these states with a CSLB license, you will have a better chance of landing the job than if you were working in another state. While some of the requirements in the license examination are removed, you still may not be eligible to work with those state’s licenses.

Due to this advantage, the bidding process will be sped up as you get the chance to complete it ahead of your competitors. The requirements for some examinations may also be waived. There are some classifications of California contractor licenses where reciprocity agreements do not apply. Several, similar classifications are eligible for this award. Landscape license codes A-21 and C-27 from Arizona, respectively, will be accepted as equals. The contract will not be authorized if it does not follow the accepted code.

Contact CA Contractor State License Board for most updated information.