Workers’ Compensation Insurance Requirements and Exemption

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Nowland Law

Newport Beach, CA

California Licensed Contractors:

Workers' Compensation Insurance Requirements and Exemption:

Business and Professions Code Section 7125

California Licensed Contractors are required to carry a valid workers compensation insurance policy as a prerequisite to maintaining an active contractors' license. The public policy is to cover all workers for jobsite injuries by making sure they are adequately insured. In addition, under California law, a contractor is immune from liability for a work related injury as long as there is a policy of workers compensation covering the worker.

There is however an exemption under California Business and Professions Code section 7125.5 to the requirement to carry workers compensation insurance if the contractor certifies that no it does not employ any person in any manner to be subject to the Workers Compensation Laws of California. This exemption does not include C-39 Roofing Contractors who must carry valid policy coverage even if they have no employees.

In order for a California Licensed Contractor to become exempt from the requirement to maintain a policy of workers compensation an exemption declaration must be filed with the Contractors State License Board. This exemption can be filed on line at their website at: or by executing a declaration when renewing the license.

California Licensed Contractors are cautioned that immediately upon employing any person subject to the California Workers' Compensation Laws, a Certificate of Workers' Compensation Insurance must be submitted to the Contractors State License Board and the coverage provided by the certificate must be continually maintained in accordance with the law.

For more information related to Contractors' State Licensing Laws and issues, contact Southern California Business Attorney Thomas F. Nowland.


Attorney Thomas F. Nowland is a Southern California based business litigation attorney practicing in the areas of business, business litigation, employment litigation, real estate, and construction law. The Nowland Law Journal is a free

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