With a fast-growing economy and dozens of Fortune 500 companies (the most in any state), California is a fantastic place to set up shop and do some business. It's also considered one of the country's most hospitable states to small businesses, ranking first when it comes to venture capital funding per capita ($84.23 million per 100,000 people). Many of the state's most entrepreneurial residents are required to obtain surety bonds to keep their businesses legitimate and reputable. Here are some of the most common California bonds obtained by savvy Golden State go-getters.
- California Contractor's License Bond - In order to obtain a California state contractor's license, professionals must first become bonded with the help of a contractor license bond. Per the California Contractor State License Board (CSLB), contractors must have a $15,000 contractor's bond before they can perform services. This bond acts as promise between the state of California and the contractor to ensure that the contractor complies with the state's licensing laws.
- California Cannabis/Marijuana License Bond - Like the California contractor's license bond, a marijuana license bond is needed before an individual is issued a license to conduct cannabis-related business in the state. In California, there are two main types of cannabis surety bonds: adult recreational and medical. Both must include an issued coverage amount of $5,000, per the Bureau of Cannabis Control.
- Durable Medical Equipment Suppliers Bond - This bond, also commonly referred to as a DMEPOS bond or a Medicare bond, is required by the Center for Medicare and Medicaid Services (CMS). It helps to reduce the prevalence of medical billing fraud as it pertains to those who supply medical equipment, prosthetics, orthotics and other medical supplies.
- California Finance Lender or Broker Bond - Businesses engaged in brokering commercial loans—including finance lenders and brokers—must furnish this type of bond to ensure compliance with the California Finance Lenders Law. The official language of the law dictates that applicants "obtain and maintain a $25,000 surety bond."
- Freight Broker Bond - In the state of California, freight brokers (those who broker between transportation carriers and those who need shipping services) are required to have a freight broker bond (BMC-84) of at least $75,000. These regulations are set forth by the Federal Motor Carrier Safety Administration (FMCSA)—a federal entity—and are therefore the same in every state.
- California Insurance Adjuster or Public Adjuster Bond - Licensed insurance adjusters and public adjusters must furnish this type of bond in the penal sum of $2,000 for a regular adjuster and $20,000 for a public adjuster. This is governed by Section 14021 in the California Insurance Code and helps ensure that the adjuster provides faithful and honest business practices.
- California Legal Document Assistant Bond - In California, legal document assistants may assist with preparation of certain legal functions. They generally do not work under the supervision of an attorney and must have their own registration and bond. The state requires that this bond be furnished for a two-year term.
- California Motor Vehicle Dealer Bond - Anyone who regularly deals in auto sales in California will need to obtain a California motor vehicle dealer bond. The licensing process requires a bond of $50,000 for a dealer surety bond, $10,000 for a wholesale-only dealer bond (less than 25 vehicles per year) and $10,000 for a motorcycle dealer and all-terrain vehicle (ATV) dealer bond.
Finding the Right Agent for California Bonds
Surety Bonds Direct works with thousands of bonded businesses in California, and we know the bonding requirements inside and out. If you're in the market for any type of surety bond required for your business in California, we encourage you to request a quote today. Note that we are able to offer the most popular California surety bonds, including contractor's bonds, with absolutely no fees. Trust us to help you get the right bond for the right price.