If you are a sole proprietor contractor in California with no employees, you may be able to get a workers’ compensation exemption through the Contractors State License Board — saving you the cost of a full workers’ comp policy while still satisfying CSLB requirements. Ready Lane Insurance files CSLB workers’ comp exemptions for qualifying contractors throughout California. Here is everything you need to know.
What Is the CSLB Workers’ Comp Exemption?
California law requires most employers to carry workers’ compensation insurance. However, the CSLB has a specific exemption available to contractor-licensees who are sole proprietors or qualify under certain other business structures and have no employees. If approved, this exemption satisfies the CSLB’s insurance requirement without requiring you to purchase a full workers’ comp policy — which can cost hundreds to thousands of dollars per year depending on your trade.
The exemption is filed directly with the CSLB and remains active as long as you remain a sole proprietor with no employees. If you hire employees at any point, you are required to obtain workers’ comp coverage immediately — the exemption no longer applies.
Who Qualifies for the Exemption?
To qualify for the CSLB workers’ comp exemption in California, you must be a sole owner of the business operating under your contractor’s license, have no employees — not even part-time workers, verify that you are the only person working under your license, and acknowledge that as an exempt sole proprietor you are personally responsible for any work-related injuries you sustain.
Officers of a corporation can also potentially qualify for an exemption, but the requirements differ from sole proprietors. Ready Lane handles both types and will confirm your eligibility when you contact us.
When Do You Need the Exemption?
Even as an exempt sole proprietor, you may need to present proof of your exemption status in several situations: when applying for or renewing your CSLB license, when pulling permits in certain jurisdictions, when a general contractor requests proof of workers’ comp coverage from subcontractors, and when bidding on certain commercial or public works projects that require insurance verification.
The exemption certificate serves as your proof of compliance in these situations. Without it — or without an actual workers’ comp policy — you may not be able to pull permits or get hired for certain jobs.
How Ready Lane Files Your CSLB Exemption
The process is straightforward. You contact Ready Lane Insurance at (619) 489-3751 or through our website. We confirm your eligibility based on your CSLB license status and business structure. We prepare and submit the exemption filing to the CSLB on your behalf. You receive confirmation of your exemption status, which you can present as proof of compliance.
We offer the CSLB workers’ comp exemption filing as a standalone service — you do not need to purchase any other insurance product from us to use it, though many contractors also use Ready Lane for their general liability and CSLB bond.
What About When You Have Employees?
If you grow your business and hire employees — even part-time helpers — your exemption becomes void immediately and you must obtain workers’ comp coverage. California has no grace period for this requirement. Failure to carry workers’ comp when you have employees is a criminal misdemeanor in California, with fines up to $100,000 per employee. Ready Lane can transition you from an exempt sole proprietor to a covered employer quickly when the time comes.
Get Your CSLB Exemption Filed Today
Ready Lane Insurance serves contractors throughout California from our Chula Vista office at 985 Broadway Ste J. We file CSLB workers’ comp exemptions quickly and affordably. For more information, visit our Workers’ Compensation California page or call (619) 489-3751 Monday through Saturday, 9am to 6pm.
Se habla español — llame al (619) 489-3751.
