California Surety Bonds

Surety bonds in California typically range in cost from 0.5% to 3.0% of the bond amount or required coverage. Most surety bonds can be instantly purchased online at Surety Bonds Direct at the fixed prices shown. Other types of California surety bonds may be priced subject to a business and personal credit review but are typically available for purchase within a few hours after the online quote request is submitted.

Larger and higher risk California surety bonds such as performance bonds for large construction projects typically range in price from 1.0% to 3.0% of the project amount. These types of surety bonds may be subject to additional underwriting including the review of an applicant’s personal and business financials.

The most common surety bond requirement in California is the state mandated $15,000 Contractor License Bond. Over 400,000 small businesses and individuals engaged in various construction related trades ranging from home improvement to large scale commercial construction projects are subject to this bond requirement implemented by the California Contractors State License Board ("CSLB").

The Contractor's Bond is necessary for the issuance of an active license, reactivation of a license, and for the maintenance of an actively renewed license. This surety bond is furnished for the benefit of any consumer who is financially damaged as a result of defective construction or other license violations, and for the benefit of employees who have not been paid wages that are due. The bond is written on a bond form approved by CSLB, by surety companies that are fully licensed and authorized to write surety bonds through the California Department of Insurance.

Another common surety bond type in California are Motor Vehicle Dealer Bonds which are required of all used car, motorcycle, and all-terrain (ATV) vehicle dealers and wholesalers as part of the business licensing process. This surety bond ensures ethical business practices are conducted by the motor vehicle dealer and the bond is typically required in a penal sum of $10,000 or $50,000 depending on dealer license type.

If supporting evidence of ownership for a vehicle is not available, the California Department of Motor Vehicles (DMV) requires a Motor Vehicle Ownership Surety Bond (aka Defective Title Bond or Certificate of Title Bond) to establish ownership and legally register the vehicle in the state. Defective Title Bonds are written for a three-year term and the required bond amount must be equal to the fair market value of the vehicle as determined by a pricing handbook such as the Kelly Blue Book.

One of the newest surety bond requirements in California is the Marijuana/ Cannabis Surety Bonds. Retailers, cultivators, manufacturers, distributors, testing laboratories, and micro-business licensees in the marijuana industry must furnish a Marijuana License Bond. This bond is mandated by the California Bureau of Cannabis Control pursuant to California Code of Regulations. A separate Medical Marijuana Bond is a surety bond required for medical marijuana dispensaries pursuant to California’s Medical Cannabis Regulation and Safety Act (MCRSA).

Surety bonds are required for businesses and individuals seeking licenses, registrations or other certifications across the state of California. Additionally, California surety bonds may be required to ensure performance of a construction contract, guarantee payment of taxes or to ensure proper estate administration by guardians, administrators and other fiduciaries in a probate court process. 

Licensed finance lenders and brokers are required to furnish surety bonds in the state. This bond is written to comply with the California Finance Lenders Law and is filed with the Commissioner of Business Oversight of the State of California. CFLL lender and broker licensees originating residential mortgage loans are required to maintain a surety bond covering all employed MLOs. The coverage or surety bond ranges from $25,000 to $200,000 and is calculated based on the amount of the licensee's loan origination volume.

California businesses are also subject to federal surety bond requirements. A couple common federal surety bond requirements include; Freight Broker Bonds (aka BMC-84 bonds) required for those operating as transportation brokers in the United States by the Federal Motor Carrier Safety Commission (FMCSA); and Durable Medical Equipment Provider (DMEPOS) Bonds.

DMEPOS surety bonds are federal surety bond required by the Centers for Medicare and Medicaid Services for suppliers of durable medical equipment, prosthetics, orthotics and supplies. This surety bond is in place to help reduce Medicare billing fraud. Suppliers must post a minimum $50,000 surety bond for each National Provider Identifier (NPI) practice location prior to receiving authorization to bill Medicare.

Major government authorities (i.e. obligees) requiring surety bonds in the state of California include: