Senate Bill 216: New Law Affecting All California Contractors
California Senate Bill 216 (SB 216) was passed in 2022, and will soon affect all licensed contractors in California.
The new law takes effect on January 1, 2026, requiring all California licensed contractors to provide the Contractors State License Board (CSLB) with proof of workers’ compensation insurance regardless of whether they have employees.
The first phase of SB 216 went into effect January 1, 2023, but had a limited application to only license classifications C-8 Concrete, C-20 HVAC, C-22 Asbestos Abatement, and D-49 Tree Service. Phase 2 of SB 216 takes effect at the start of 2026 and broadens the law’s application to all contractor license classifications. If contractors have CSLB license renewals between January 1, 2026 and June 30, 2026, then the CSLB will not renew their license without proof of workers’ compensation coverage. License holders with CSLB license renewal dates after June 30, 2026 must file proof of workers’ compensation insurance with CSLB by July 1, 2026.
For many owner-operator contractors with no employees, this means they’ll need to purchase their first Workers Compensation policy. Known as “ghost policies”, workers compensation policies based on $0 employee payroll will theoretically have no exposure and cover no employees, so the question of policy-cost will largely be determined by the “minimum premium” an insurer is legally able to charge for a policy, which often varies by contractor license classification. These minimum premiums can range from the hundreds to several thousand.
Owner-operator contractors will benefit by working with a broker that knows your industry, knows contracting insurance, and works with multiple insurers, so that you’re not stuck with a high minimum premium for your ghost policy.
Eclipse has specialized in insuring contractors for over 30 years. We know your industry, and work with multiple carriers that write coverage specifically for licensed contractors. In addition to Workers Comp ghost policies, we can help you with General Liability, Errors & Omissions, Commercial Auto, Property, Inland Marine, and Bonds, to name a few.
For more information about ghost policies, or other insurance or risk management questions, please contact us today at 800-530-4448, or info@eclipseinsurance.com.
About the Author
Larry St. John is a 20+ year veteran of insurance and risk management for the construction and electronic security industries.
He can be reached at LStJohn@eclipseinsurance.com
