General Contractor License Requirements

Before working as a general contractor, you must meet specific general contractor license requirements, which vary based on your state, locality and the size of the project. These requirements often involve passing exams that cover trade-specific knowledge, business practices and local laws. Applicants must also provide proof of relevant work experience and obtain necessary insurance and bonds.

A general contractor is a professional responsible for overseeing construction projects from planning to completion. They typically operate under formal contracts outlining their scope of work and responsibilities. They may work on new builds, renovations, remodels or infrastructure projects and must have a keen understanding of regulations, codes and safety requirements.

In addition to a state contractor license, general contractors are often required to carry certain types of insurance. For instance, they are mandated to obtain general liability insurance to protect themselves and their clients from potential risks, including property damage, accidents or injuries that might occur on the job site.

States often require a general contractor license to ensure that individuals managing complex projects have the skills and knowledge necessary to complete work safely and in compliance with applicable codes. Generally, this includes any work involving structural changes, electrical installations, plumbing work or projects above a certain dollar threshold.

Smaller projects such as minor repairs, maintenance or simple remodeling may not require a state contractor license. However, depending on their complexity and scope, even minor projects can trigger licensing requirements. 

Licensing requirements vary from state to state and often depend on the type of work performed. For example, a home improvement contractor license may differ from a license required for commercial projects. Before starting any project, verify whether your state or local jurisdiction mandates a self-contractor license or other specific permits for your area of work.

States like New York, Florida and California typically have strict licensing rules. However, there are some states that don’t require contractor licenses, including: 

• Colorado
• Florida
• Louisiana
• New York
• Ohio
• Pennsylvania
• Wyoming
• Dakota

Generally, applicants must be at least 18 years old and have relevant work experience or educational qualifications in construction. Many states require candidates to have a minimum number of years of practical experience, usually between three to five years, or to have completed formal training or coursework in construction management, engineering or a similar field. 

Another key requirement involves passing a series of examinations, which often cover trade-specific knowledge, business management and relevant state laws or regulations. Also, as mentioned earlier, most states mandate that general contractors obtain certain types of insurance and bonding to protect their clients, workers and the public.

Below gives you an idea of how requirements for general contractor licenses vary by state.

In California, individuals or businesses undertaking construction projects valued at $500 or more must obtain a general contractor license. The Contractors State License Board (CSLB) oversees the licensing process and offers various classifications, including:

• Class A (General Engineering Contractor): For projects requiring specialized engineering knowledge and skills
• Class B (General Building Contractor): For projects involving two or more unrelated building trades
• Class C (Specialty Contractor): For specific trades such as plumbing, electrical, or roofing

Applicants must have at least four years of relevant work experience within the past decade. They are also required to pass both a trade-specific exam and a business and law exam. Additionally, proof of general liability insurance and a surety bond are necessary to ensure financial responsibility and client protection.

Florida offers two types of licenses for general contractors: a certified license, which allows contractors to work anywhere in the state, and a registered license, which permits work in specified local jurisdictions. Applicants must choose one of three classifications: Residential Contractor, Building Contractor or General Contractor, with each requiring varying levels of expertise and project scope. 

New licensees must fulfill at least four years of relevant work experience, though a combination of education and hands-on experience may also suffice. Florida mandates passing a trade exam, business exam and law exam. Additionally, applicants must submit a financial statement showing stability and provide proof of general liability and workers’ compensation insurance.

In Georgia, applicants must be at least 21 years old and demonstrate good character, financial responsibility and relevant experience. The licensing process involves passing a two-part examination: the National Association of State Contractors Licensing Agencies (NASCLA) Accredited Examination for Commercial General Building Contractors and the Georgia Business and Law exam. 

Additionally, applicants must provide proof of general liability insurance with a minimum coverage of $500,000 per occurrence and, if applicable, workers' compensation insurance.

Texas does not have state-level requirements for a general contractor license, but local municipalities may impose their own licensing rules. Contractors working in specialized fields such as plumbing, electrical or HVAC must obtain state licenses. For example, electricians and plumbers need on-the-job training, must pass relevant exams and register with state boards. 

While general contractors not working in these fields may not need a state license, all businesses must obtain a general business license.

Renewing a general contractor license is essential for maintaining an active status and legally operating as a contractor. Most states require license renewal on an annual or biannual basis, with varying requirements. Renewal processes often involve providing proof of continued insurance coverage and fulfilling any continuing education requirements to stay up to date with industry standards and regulations.

Renewal fees also typically apply and can vary significantly by state. Also, note that late renewal may result in penalties or even license suspension.

General contractors need a range of insurance coverage and bonds to protect their business, employees and clients. These may include: 

• General liability insurance: This policy covers claims related to bodily injury, property damage and accidents that occur during a project. For example, if a passerby is injured due to worksite activity, this coverage helps handle medical costs and legal expenses. 
• Professional liability insurance: This insurance covers claims of negligence, mistakes or failure to meet professional standards. If a contractor's work leads to financial loss for a client, this policy helps with the legal fees and settlements. 
• Workers’ compensation insurance: If you employ workers, this policy covers medical costs and lost wages if an employee suffers a work-related injury or illness. Workers’ compensation insurance also provides financial support in case of accidents. 
• Builder’s risk insurance: This policy covers damages to a construction project during its building phase. Covered risks often include fire, vandalism and severe weather events. 
• Commercial auto insurance: For contractors using vehicles for business purposes, commercial auto insurance covers liability and physical damage. Coverage applies to accidents, theft and other incidents that can happen on the road. 
• Contractor’s tools and equipment insurance: This policy provides protection for tools and equipment used on the job site. It covers items that are damaged, stolen or lost. 
• Surety bonds: Surety bonds guarantee that the contractor will fulfill the terms of a project contract. If the contractor fails to meet these terms, the client can claim compensation against the bond.