Louisiana requires liability limits of 15/30/25. That covers $15,000 for one person's injuries, $30,000 total for injuries per accident, and $25,000 for property damage. Here's how that compares with a common higher-limit setup:
Louisiana requires liability limits of 15/30/25. That covers $15,000 for one person's injuries, $30,000 total for injuries per accident, and $25,000 for property damage. Here's how that compares with a common higher-limit setup:
Deductibles work in your favor if you plan carefully. Moving collision from $500 to $1,000 typically lowers your premium, as long as you can actually cover $1,000 the day a claim happens. Keep an eye on your comprehensive deductible too, since flood and hail claims fall there. Don't cut liability limits to save money, though. Lowering liability saves little and leaves you exposed in exactly the type of claim Louisiana sees most.
Louisiana's licensing board (the LSLBC) requires most contractors to carry General Liability insurance, plus Workers' Compensation if they have employees. Residential and home improvement contractors now need at least $500,000 in General Liability. Your policy also has to cover every type of work your license allows, and the exact requirements depend on your license type and project size.
That short answer covers the headline. The details are where contractors in Covington, Slidell, and the rest of St. Tammany Parish run into trouble.
Picture a remodeler in Mandeville renewing a home improvement registration in 2026. They assume the same $100,000 liability policy they've carried for years still works. It doesn't. The board raised the floor, and an outdated certificate can stall a renewal or put an active license at risk.
The other common mistake is a policy that technically meets the dollar amount but quietly excludes roofing, foundation work, or another activity the contractor is licensed to do. On paper it looks fine. To the board, it's a gap.
This guide breaks down what the board asks for on residential, home improvement, and commercial licenses. It also covers the policy wording problems that tend to cause headaches, and how to line up coverage before your next application or renewal lands on someone's desk in Baton Rouge.
Louisiana Contractor Insurance Basics
The Louisiana State Licensing Board for Contractors looks at insurance as part of whether you're fit to hold a license. Two coverages show up almost everywhere: General Liability and Workers' Compensation.
General Liability covers damage you cause to someone else's property and injuries to people who aren't your employees. Think of a homeowner who trips over your extension cord, or a nail gun misfire that cracks a neighbor's window. Workers' Compensation covers your own crew when they get hurt on the job.
The board's Workers' Compensation rule is simple. Any contractor with one or more employees must provide proof of Workers' Compensation coverage under Title 23 of the Louisiana Revised Statutes. There's no headcount loophole: one helper counts.
The big change in 2026 came through Act 757 of the 2026 Legislative Session. The board laid out the details in its notice on insurance changes following Act 757. Two pieces matter most:
- Higher liability minimums for residential and home improvement contractors
- Scope matching, meaning your policy has to cover everything your license covers
That second point catches more people than the dollar amount. A policy can be big enough and still fail the board's review because of one exclusion buried on page 14.
Insurance for Residential and Home Improvement Licenses
Which rules apply to you starts with what you're licensed for. The board recently lowered the threshold for a full Residential Building Contractor license to $50,000 for new construction or major renovations. It used to be $75,000. Smaller remodels that once flew under the radar may now push you into full residential licensing.
Below that line, Home Improvement Registration is required for residential remodeling and renovation projects valued between $7,500 and $50,000. That covers a lot of everyday St. Tammany work: kitchen redos, bathroom remodels, deck rebuilds, and storm repairs after a rough hurricane season.
Insurance-wise, both groups now face the same liability floor.
General Liability Limits for Home Projects
Residential and home improvement contractors must now carry at least $500,000 in General Liability insurance. That's five times the old $100,000 minimum.
Honestly, $100,000 was thin for years. One kitchen fire from a botched electrical tie-in can blow past that before the drywall comes down. The new minimum is closer to what a serious claim actually costs.
The scope requirement matters just as much. The board states that policies must cover all scopes of work for which a contractor is licensed, and that exclusions for licensed activities will lead to license suspension. Watch for these common exclusions on contractor policies:
- Roofing exclusions, often added to general remodeler policies
- Height limits that exclude work above two or three stories
- New residential construction exclusions, which some carriers may add to remodel-focused policies
- Subcontractor conditions that may void coverage if subs don't carry their own insurance
If you hold a residential license and your policy excludes new home construction, that's a mismatch the board can act on.
Workers Compensation for Residential Crews
If you have even one employee, you need Workers' Compensation. Residential crews often use a mix of W-2 workers, 1099 subs, and family members who "just help out on Saturdays." That mix is where gaps happen.
Louisiana law can treat an uninsured sub's worker as your responsibility if something goes wrong. Collect certificates of insurance from every sub, every year, and keep them on file.
Sole proprietors with no employees have another route. Many can use a "ghost policy," which is a minimum-premium workers' comp policy with zero payroll. It typically satisfies the board's proof requirement at a lower cost. Ghost policies don't cover the owner's own injuries the way a full policy might, so ask how a specific carrier handles that before you rely on one.
Commercial License Coverage Requirements
A commercial license is required for any project used for commercial purposes valued at $50,000 or more. That includes retail build-outs on Highway 190, restaurant renovations in Old Towne Slidell, and warehouse work near the interstate.
Specialty trades have a lower trigger. Electrical, mechanical, and plumbing work requires a specialty license once the project value exceeds $10,000. An electrician wiring a mid-sized office suite reaches that number fast.
The insurance rules for commercial licensees start with the same principles:
- Workers' Compensation is required if you have any employees, under the same Title 23 rule.
- General Liability has to match your licensed classifications, with no exclusions for work you're licensed to do.
- Certificates should list the correct legal entity name exactly as it appears on your license.
The $500,000 minimum in the 2026 memorandum specifically applies to residential and home improvement contractors. Commercial applicants should confirm the current figure for their classification directly with the board before they submit.
In practice, the board's minimum is rarely the number that matters on commercial jobs. Owners, general contractors, and lenders usually write their own limits into the contract. Those often include umbrella coverage, additional insured endorsements, waivers of subrogation, and completed operations coverage. A contractor can meet the state minimum and still fail to qualify for the bid. Read the insurance section of a contract before you price the job, not after you win it.
Louisiana Licensing Board Insurance Comparison
Here's how the main license types compare. This table reflects the board's published rules as of 2026. Specific carrier terms may vary.
| Home Improvement | Residential | Commercial | |
|---|---|---|---|
| When required | Residential remodels $7,500 to $50,000 | New construction or major renovation $50,000+ | Commercial projects $50,000+ |
| General Liability minimum | $500,000 | $500,000 | Confirm with the board for your classification |
| Previous GL minimum | $100,000 | $100,000 | N/A |
| Workers' Comp | Required with 1+ employees | Required with 1+ employees | Required with 1+ employees |
| Scope exclusions allowed? | No, policy must cover licensed work | No, policy must cover licensed work | No, policy must cover licensed work |
| Ghost policy option | May apply for sole proprietors | May apply for sole proprietors | May apply for sole proprietors |
| Contract-driven limits | Occasionally | Sometimes (builders, lenders) | Very common |
Specialty electrical, mechanical, and plumbing licenses kick in above $10,000 and follow the same Workers' Comp rule.
The pattern is clear. Residential and home improvement contractors now share a firm liability floor. Commercial contractors deal more with what the project owner demands than with the state minimum. All three groups face the same scope-matching rule, and that's the one most likely to cause trouble at renewal.
Common Questions About Louisiana Contractor Insurance
Do I really need $500,000 in liability if I only do small bathroom remodels? Yes. If you hold a home improvement registration or residential license, the board's minimum is $500,000 regardless of how small your typical job is.
I work alone. Do I still need workers' comp? The legal requirement applies once you have one or more employees. Many solo contractors still carry a ghost policy because it may satisfy the board's proof requirement at a lower premium.
What happens if my policy excludes something I'm licensed for? The board treats that as a coverage failure, and it can lead to license suspension. Have your agent check the exclusions page against your license classifications.
Can I help homeowners with their insurance claims after a storm? No. Contractors can't interpret insurance policies or adjust claims for clients. Advertising as an "insurance claims specialist" is a legal violation in Louisiana.
Does my 1099 subcontractor's insurance protect me? It can, but only if they actually carry it and you have a current certificate on file. Without one, their injuries or damage may end up on your policy.
When should I update my coverage?
Update it before your renewal date, and any time you add a license classification. Adding commercial work or a new trade without updating your policy is how gaps start.
Making the Right Choice for Your Local Business
Louisiana's 2026 changes come down to three things. Residential and home improvement contractors need at least $500,000 in General Liability. Anyone with employees needs Workers' Compensation. Every policy has to cover the full scope of your license, with no exclusions.
Commercial contractors have a different challenge: owner contracts usually set the real bar, so your coverage has to match the job as well as the board.
Don't let the wording on your policy decide whether you keep your license. Pull your current declarations page and exclusions, set them next to your license classifications, and look for mismatches. If anything doesn't line up, fix it now rather than finding out at renewal.
Aubert Insurance Agency has served contractors and families from offices in Covington and Slidell since 1910. As an independent agency, we compare options from multiple carriers and explain what each policy covers and excludes before you sign. Ready to see where you stand? Start a Quote today and we'll do the shopping for you.
About the Author
Kyle Beerbohm
President
We've been independent since 1910, and four generations of local ownership have kept us that way. We're one of the oldest agencies in St. Tammany Parish and the fourth oldest business in the City of Covington. I treat that history as a responsibility rather than a plaque on the wall. My job is to keep us answering to the families and business owners who walk through our doors, and to keep serving this parish for another hundred years.
