California Contractor License Bonds
What is a California Contractor License Bonds?
As a condition of licensure, California contractors typically must furnish one or more of the following surety bonds. Surety Bonds Direct charges absolutely no fees for California Contractor Bonds!
- A $25,000 Contractor's Bond (most common) is required by the Contractors State License Board (CSLB). The surety bond is a promise between the surety company and the State of California that the contractor (principal) will comply with the State Contractors License Law (B&P Code Section 7000). As a convenience to you, Surety Bonds Direct files all Contractor's Bonds electronically with the CSLB free of charge.
- A $25,000 Bond of Qualifying Individual is a required by the CSLB in addition to the Contractor’s Bond if the license is qualified by a Responsible Managing Employee (RME) or, if the license is qualified by a Responsible Managing Officer (RMO) who owns less than 10% of the corporation’s voting stock.
- A $15,000 Disciplinary Bond is required if a license has been revoked for a violation of the Contractors' License Law. The bond must be filed with the Registrar in order to reinstate or reissue the license.
Many California cities including Los Angeles and Fremont also require job specific license or permit surety bonds in varying amounts for construction projects such as grading, encroachment and right of way work. If this bond is for a job that you are bidding or a contract that has been awarded to you, the surety bond you need is a Contract/Construction Bond rather than a Contractor License Bond.
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Why is a California Contractor Bond Required?
In a situation where damages occur because the contractor (principal) failed to comply with the State Contractors License Law (B&P Code Section 7000), the surety company is financially obligated to cover damages up to the bond limit (or penalty). The obligee for the Contractor's Bond is the Contractors State License Board (CSLB). The specific bond form required by the CSLB is prepared and pre-populated for your convenience by Surety Bonds Direct. The surety bond limit, term, and other key information related to the obligation are found on the bond form.
Contractor Bonds And Getting Your California Business License/Registration
Detailed licensing information for various contractor classes can be found at the Contractors State Licensing Board website. The following is a guide with helpful advice, tips and information from the California Contractors License Board and Surety Bonds Direct on maintaining your Contractor's Bond.
- If a license is renewed, you must comply with the bond requirements.
- A bond must be written by a surety company licensed through the California Department of Insurance. As a licensed insurance agency in California, Surety Bonds Direct (License# 0K22139) only works with insurance carriers meeting these criteria.
- The bond must be received at the CSLB headquarter's office within 90 days of the effective date.
- The bond remains in effect until the CSLB receives a notice from the surety company cancelling the bond.
- Only one bond can be in effect at a time. A second bond filed for the same period cancels out the first bond.
- A bond cannot be transferred from one license to another or from one qualifying individual to another.
- Effective date of a new bond should be the same as the cancellation date of the expiring bond.
- If a license has more than one Responsible Managing Employee or Responsible Managing Officer, each qualifier must comply with the qualifier bond requirements.
- The CSLB cannot return any bond that has been accepted for an active license.
- Failure to maintain continuous bond coverage will result in the license being suspended. Any work performed while the license is suspended is considered to be unlicensed and disciplinary action can be taken against you.
Additional California Contractor Bond Resources & Links
Note: The required amount of a California Contractor’s Bond increased from $15,000 to $25,000 on Jan 1, 2023 as a result of Senate Bill 607. The bond of qualifying individual increased from $12,500 to $25,000 as well. Find more information about the bond increases.