Commercial insurance offers one of the most lucrative paths in the insurance industry. You can work with businesses of all sizes — from small retail shops to large manufacturing operations — helping them protect their assets, manage risk, and comply with regulatory requirements.
The commission potential in commercial insurance typically exceeds what you’d earn selling personal lines, sometimes dramatically so. Business insurance premiums are larger, policies are more complex, and commercial clients often need multiple coverage types. This creates opportunities for substantial income if you develop the expertise to serve commercial accounts effectively.
California requires specific licensing to sell commercial insurance, particularly property and casualty products. The process involves education, testing, and meeting regulatory requirements. Recent changes to California’s licensing laws have also affected how you prepare for commercial insurance licensing.
If you’re considering a career in commercial insurance, here’s what you need to know about becoming licensed in California.
What Commercial Insurance Agents Sell
Commercial insurance agents sell various coverage types to businesses, organizations, and other commercial entities. The specific products depend on your license type, but commercial agents typically work with:
- Commercial Property Insurance — Coverage for buildings, equipment, inventory, and other business property against fire, theft, vandalism, and other perils
- General Liability Insurance — Protection against claims of bodily injury or property damage caused by business operations
- Workers’ Compensation Insurance — Coverage for employee injuries or illnesses arising from employment
- Commercial Auto Insurance — Coverage for vehicles used for business purposes
- Business Owner’s Policies (BOPs) — Packaged policies combining property and liability coverage for small to medium-sized businesses
- Professional Liability (Errors & Omissions) — Coverage for businesses that provide professional services, protecting against claims of negligence or mistakes
- Cyber Liability Insurance — Protection against data breaches, cyber attacks, and related business interruptions
- Commercial Umbrella Insurance — Additional liability coverage beyond underlying policy limits
The complexity of commercial insurance creates higher barriers to entry than personal lines, but also creates opportunities for agents who develop specialized knowledge in specific industries or coverage types.
The Difference Between Personal Lines and Property & Casualty Licenses
California offers two main pathways for agents selling property and casualty insurance:
- Personal Lines License — Authorizes you to sell individual and family insurance products like auto insurance, homeowners insurance, renters insurance, and similar personal coverage
- Property & Casualty License — Includes everything in personal lines plus commercial insurance products for businesses
There is no standalone commercial insurance license in California. If you want to sell commercial insurance, you need either a full Property & Casualty license or you need to upgrade from a Personal Lines license by passing an additional exam.
Many new agents start with a Personal Lines license because the educational requirements are slightly less extensive and the exam is somewhat shorter. Once licensed for personal lines, agents can then pursue the Commercial Only exam to upgrade to a full Property & Casualty license that includes both personal and commercial authority.
Other agents pursue the full Property & Casualty license from the start, completing all requirements and passing the comprehensive P&C exam that covers both personal and commercial insurance. This approach requires more upfront education and a longer exam, but allows you to sell all property and casualty products immediately upon licensing.
2026 Update: How California’s Recent Licensing Changes Affect Commercial Insurance Agents
Before we get into how to become a commercial insurance agent, we wanted to note a quick change to how licensing works.
Prior to 2026, those that wanted to become insurance agents of any type were expected to complete over 20 hours of prelicensing courses. These courses we mandatory.
California Assembly Bill 943 (AB 943) eliminated mandatory prelicensing courses for most insurance license types as of January 1, 2026. This change affects commercial insurance licensing in important ways.
Previously, agents pursuing a Property & Casualty license were required to complete 52 hours of timed prelicensing education — 20 hours of personal lines instruction, 20 hours of commercial lines instruction, and 12 hours of Code and Ethics.
Agents upgrading from Personal Lines to Property & Casualty were required to complete 20 hours of commercial lines instruction before qualifying to take the Commercial Only exam.
These coursework requirements are now optional. California no longer mandates the 20-hour personal lines or 20-hour commercial lines instruction. The only remaining mandatory education is the 12-hour Code and Ethics course, which all insurance agents must complete before their license can be issued.
This creates both flexibility and risk. You have more freedom in how you prepare for your licensing exam. You’re not required to spend 20 or 52 timed hours in prelicensing courses if you believe you can prepare effectively through other methods.
However, the exam itself hasn’t changed and the exam, even with mandatory courses, has historically had an extremely high failure rate. The California Property & Casualty licensing exam — and the Commercial Only exam for agents upgrading from Personal Lines — still cover the same comprehensive material. Commercial insurance is complex, technical, and requires detailed knowledge of coverage types, exclusions, endorsements, underwriting principles, state regulations, and ethical practices.
The elimination of required coursework doesn’t mean the exam is easier. It means you’re responsible for ensuring you’re genuinely prepared before attempting it.
LyteSpeed Learning has one of the lowest failure rates in the industry, as our coursework is specifically designed to both help you understand how to sell insurance AND how to pass your exam.
Steps to Become a Commercial Insurance Agent in California
The process depends on whether you’re starting from scratch or upgrading from an existing Personal Lines license.
Path 1 — Obtaining a Property & Casualty License from the Start
- Complete the 12-Hour Code and Ethics Course — This is California’s only remaining mandatory prelicensing education. Every insurance applicant must complete 12 hours of instruction covering California Insurance Code, ethical practices, and state-specific regulations. This course can be completed online or in-person through a CDI-approved provider. Do not skip this requirement. Without proof of completion, your license application will not be processed even if you pass your exam.
- Prepare for the Property & Casualty Licensing Exam — The exam covers both personal lines and commercial insurance. You’re responsible for mastering all material outlined in the California Department of Insurance’s License Examination Objectives, including property insurance principles, liability coverage, commercial policies, business insurance, underwriting, state regulations, and ethical practices. Even though California no longer requires prelicensing courses, the exam difficulty hasn’t changed. LyteSpeed Learning offers Property & Casualty exam prep courses that align with current exam requirements and help you pass on your first attempt.
- Schedule and Pass Your State Exam — Once prepared, schedule your Property & Casualty licensing exam through PSI Services LLC, the CDI’s testing vendor. The exam is computer-based and available at testing centers or online with remote proctoring. You must achieve a passing score to proceed with your licensing application. If you don’t pass on your first attempt, you can retake the exam for an additional fee, but each failure delays your ability to start working.
- Submit Fingerprints for Background Check — After passing your exam, complete a Live Scan fingerprinting appointment for a criminal background check. California requires this screening before issuing any insurance license. Find an approved Live Scan location through the CDI website.
- Apply for Your Property & Casualty License — Submit your license application through the National Insurance Producer Registry (NIPR) or directly through the CDI. Your application requires proof of Code and Ethics course completion, exam passage, and background check clearance. Make sure you apply for all authority lines you’re eligible to hold.
Path 2 — Upgrading from Personal Lines to Property & Casualty
If you already hold a Personal Lines license and want to add commercial authority, the process is:
- Prepare for the Commercial Only Exam — This exam tests your knowledge of commercial insurance specifically. You’re responsible for mastering commercial property coverage, general liability, workers’ compensation, commercial auto, business owner’s policies, and other commercial lines products. California no longer requires the 20-hour commercial insurance prelicensing course, but the exam covers all the same material. LyteSpeed Learning offers Commercial Only exam prep designed specifically for Personal Lines agents upgrading to full Property & Casualty authority.
- Schedule and Pass the Commercial Only Exam — Once prepared, schedule your exam through PSI Services LLC. Passing this exam upgrades your Personal Lines license to a full Property & Casualty license, adding commercial insurance authority.
- Update Your License Application — After passing the Commercial Only exam, submit the necessary paperwork to upgrade your license. The CDI will process your upgrade and issue your updated Property & Casualty license.
Why Proper Exam Preparation Still Matters
One of the biggest misconceptions about AB 943 is that eliminating mandatory coursework means you can skip education and still pass the exam. This assumption leads to failure.
Commercial insurance is more complex than personal lines. Policies are customized to specific business types, coverage options are extensive, endorsements and exclusions require detailed understanding, and underwriting principles are more nuanced. The California licensing exam for commercial insurance reflects this complexity.
Even when prelicensing courses were mandatory, many applicants struggled with commercial insurance exams. Failure rates were significant. Now that coursework is optional, pass rates are likely to decrease unless candidates take preparation seriously.
Effective exam preparation for commercial insurance includes:
- Reviewing the CDI’s License Examination Objectives — These outlines specify exactly what topics the exam will cover. Read them carefully so you understand the scope of material you need to master.
- Enrolling in Quality Exam Prep Courses — Even though coursework is no longer required, comprehensive exam prep is still available and highly valuable. LyteSpeed Learning’s Property & Casualty courses and Commercial Only courses are designed to prepare you for California’s licensing exams with expert instruction, practice exams, and study resources.
- Creating a Study Plan — Without mandatory coursework, you’re responsible for your own study schedule. Set aside dedicated time to review material, take practice tests, and reinforce concepts you find challenging.
- Taking Practice Exams — Practice exams help you identify weak areas, familiarize you with exam format, and build confidence. This step is critical for commercial insurance exams because the material is extensive.
- Focusing on Commercial-Specific Coverage — If you’re upgrading from Personal Lines, pay special attention to commercial property, general liability, workers’ compensation, and commercial auto coverage. These are the primary areas the Commercial Only exam tests.
Common Mistakes to Avoid
Aspiring commercial insurance agents often make preventable mistakes during the licensing process:
- Underestimating Exam Difficulty — The elimination of mandatory coursework does not mean the exam is easier. Commercial insurance exams are comprehensive and challenging. Skipping preparation or rushing through the process leads to failure.
- Assuming Personal Lines Knowledge Translates Directly to Commercial — Personal lines and commercial insurance are different. Coverage types, underwriting considerations, policy structures, and regulatory requirements differ significantly. If you’re upgrading from Personal Lines, don’t assume you already know commercial insurance.
- Not Completing the Code and Ethics Course Early — Some applicants wait until after passing the exam to complete the mandatory 12-hour Code and Ethics course. This delays license issuance. Complete this course early in your preparation process.
- Failing to Study Commercial-Specific Regulations — Commercial insurance is subject to additional regulations, particularly around workers’ compensation, general liability, and professional liability. Make sure you understand California-specific commercial insurance laws.
- Relying Solely on Self-Study Without Structure — While self-study is possible, most people benefit from structured instruction, expert guidance, and practice exams. Commercial insurance is complex enough that unstructured preparation often leaves gaps in knowledge.
At LyteSpeed Learning, we are here to help you find the courses you need to pass your exams. We even have consultants that can help you sell insurance licensing if you need additional support.
Continuing Education for Commercial Insurance Agents
Once licensed, California requires Property & Casualty agents to complete 24 hours of continuing education every two years to maintain their license. This includes at least 3 hours of ethics training.
For commercial insurance agents, continuing education provides opportunities to deepen knowledge in specialized coverage areas, stay current on regulatory changes, learn about emerging risks like cyber liability, and develop expertise in specific industries or business types.
LyteSpeed Learning offers Property & Casualty continuing education courses including packages designed specifically for commercial insurance agents. These courses help you meet renewal requirements while expanding your commercial insurance knowledge.
Career Opportunities in Commercial Insurance
Commercial insurance offers diverse career paths. You can work as a captive agent representing a single carrier, an independent agent placing business with multiple carriers, a wholesale broker specializing in hard-to-place risks, or a commercial lines specialist focusing on specific industries.
Many commercial agents specialize in particular business types — construction, restaurants, professional services, manufacturing, technology companies — developing deep expertise that makes them valuable to clients in those industries.
The income potential in commercial insurance typically exceeds personal lines because premiums are higher, policies are more complex, and businesses often need multiple coverage types. Building a book of commercial business creates sustainable income through renewals and referrals.
Getting Started with Commercial Insurance Licensing
Whether you’re pursuing a Property & Casualty license from scratch or upgrading from Personal Lines to add commercial authority, proper preparation is essential.
California’s licensing exams are rigorous. The recent elimination of mandatory prelicensing courses doesn’t change that. Success requires comprehensive exam preparation, mastery of commercial insurance principles, and genuine understanding of the material.
LyteSpeed Learning has been California’s leading insurance education provider for decades. Even though prelicensing courses are no longer mandatory, LyteSpeed offers Property & Casualty exam prep, Commercial Only exam prep, and continuing education courses designed to help you succeed in California’s commercial insurance market.
If you’re ready to pursue commercial insurance licensing, or if you have questions about which pathway is right for your situation, explore LyteSpeed Learning’s course offerings or contact us at (800) 220-3923. We’re here to help you navigate California’s licensing requirements and build a successful career in commercial insurance.
