CALIFORNIA Home Improvement Contract Law Insurance Disclosure Test Question 8

8. My contract includes statements about whether or not I carry Workers Compensation and Liability Insurances for my business. 

CORRECT ANSWER IS YES

Here is why: This is covered under section 7159 of the California Business and Professions Code. Part of the changes made to contractors law recently,covered in SB30, SB1113 and AB316, included specifying notices concerning Workers Compensation and Liability Insurance. Here is the text of this notices and the law which covers this:

(e) Except as provided in paragraph (8) of subdivision (a) of Section 7159.5, all of the following notices shall be provided to the owner as part of the contract form as specified or, if otherwise authorized under this subdivision, may be provided as an attachment to the contract:

(1) A notice concerning commercial general liability insurance. This notice may be provided as an attachment to the contract if the contract includes the following statement: "A notice concerning commercial general liability insurance is attached to this contract." The notice shall include the heading "Commercial General Liability Insurance (CGL)," followed by whichever of the following statements is both relevant and correct:

(A) "(The name on the license or "This contractor") does not carry commercial general liability insurance."

(B) "(The name on the license or "This contractor") carries commercial general liability insurance written by (the insurance company). You may call the (insurance company) at __________________________ to check the contractor's insurance coverage."

(C) "(The name on the license or "This contractor") is self-insured."

(2) A notice concerning workers' compensation insurance. This notice may be provided as an attachment to the contract if the contract includes the statement: "A notice concerning workers' compensation insurance is attached to this contract."The notice shall include the heading "Workers' Compensation Insurance" followed by whichever of the following statements is correct:

(A) "(The name on the license or "This contractor") has no employees and is exempt from workers' compensation requirements.

(B)  "(The name on the license or "This contractor") carries workers' compensation insurance for all employees."