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Plumbing as an LLC: The $100,000 Worker Bond
The CSLB treats an LLC license differently. The standard $25,000 bond stays, a $100,000 employee/worker bond joins it, and general liability becomes a matter of statute — at a limit that climbs as you add people, not just something a GC asks for. Here’s the whole stack, straight.
One Entity Choice, Two Extra Requirements
Nothing about the LLC rules replaces the standard requirements. They stack on top.
Every active CSLB licensee — sole proprietor, corporation, or LLC — carries the $25,000 contractor license bond. When the licensed entity is an LLC, the CSLB adds two more requirements on top of it.
First, a $100,000 employee/worker bond. It stands behind what the LLC owes the people who turn the wrenches: employee wages, interest on those wages, and fringe benefits. Where a collective bargaining agreement is in place, it also reaches welfare fund, pension fund, and apprentice program contributions. Like every bond on this site, $100,000 is the penalty amount the bond covers, never what it costs you. The CSLB requires it on file only when the licensed entity is an LLC; sole props and corporations skip it entirely.
Second, general liability by statute — and the limit scales. For sole props and corporations, general liability is what jobsites and GCs demand by contract. For an LLC, California law writes the requirement into the license itself: a $1,000,000 aggregate for five or fewer persons, another $100,000 of aggregate limit for each person beyond the fifth, capped at $5,000,000. Grow the crew and the floor moves with it — which is why a limit that satisfied the statute two hires ago may not satisfy it today.
Sole Prop and Corp vs. LLC: What Each Must Carry
Same trade, same license classification — a different entity type changes the list.
| Requirement | Sole prop / corp | LLC |
|---|---|---|
| $25,000 license bond | Sole prop / corp: required — every active licensee | LLC: required — every active licensee |
| $100,000 worker bond | Sole prop / corp: not required | LLC: required — LLC licensees only |
| General liability | Sole prop / corp: not a CSLB requirement — most GCs and jobsites require it by contract | LLC: required by statute — $1,000,000 aggregate for five or fewer persons, rising with headcount |
| Workers’ comp | Sole prop / corp: required once you have employees. Running solo, the C-36 exemption applies only if you file it with CSLB — it ends at your first hire, and it is off the table if you also hold C-8, C-20, C-22, C-39, or D-49. | LLC: required once you have employees. Entity type doesn’t change the rule — the exemption still has to be filed, and still ends at the first hire. |
Thinking of converting to an LLC?
The liability protection may be worth it — but the insurance stack changes the math. The $100,000 worker bond and the statutory general liability arrive with the entity change, and the required GL limit tracks your headcount from that day forward. Worth pricing the full stack before the conversion, not after. Talk it through with a producer →
What Trips LLC Licensees
Three misses we see on LLC licenses — each one avoidable, each one a license problem if ignored.
- Bond amounts must match the entity type on file. If CSLB records show an LLC, the $25,000 bond alone doesn’t satisfy the rules — the $100,000 worker bond has to be on file too. Converting the entity without updating the bonds is the classic miss.
- The statutory GL minimum is aggregate, and it moves. The law sets a $1,000,000 aggregate floor for five or fewer persons and raises that floor as you add people — so a certificate showing only a per-occurrence figure, or an aggregate written below the floor your current headcount calls for, doesn’t satisfy it. We check how the limit is written and what headcount it has to carry, not just that a number appears.
- Letting either lapse has license consequences. A lapsed worker bond or lapsed statutory GL is a license problem, not just an insurance problem. Calendar both renewal dates — or tell us your renewal month and we’ll send a heads-up before it.
The LLC Stack Is Bigger. The Answer Is Still Straight.
Four taps, a market benchmark computed in the page before any form asks who you are, and an honest verdict — including “stay put” if that’s the truth.
This is a market benchmark, not a quote or offer of insurance — actual premiums are determined by carriers upon application. Aster National Insurance Group · CA Lic #0N10039.