Applicant's for a general contractor or any of the "C-" license classes must file a California contractor's license bond with the state licensing board. Per the Board's fact sheet, "Contractors commonly use a surety bond (referred to as a "contractor license bond") which obligates the surety to the State of California to pay damages if the contractor violates contractors' state license laws and/or Board regulations. If a contractor has been disciplined, the Board may require a separate bond for contractors referred to as a "disciplinary bond". The California contractor license bond carries a penal amount of $25,000 (as of January 1st, 2023), and the disciplinary bond penalty is set by the Board in its discretion however it may not be less than $15,000 or greater than ten times the contractor license bond with a duration of no less than least two (2) years.
A contractor's license bond is required from all applicants, active and renewal licensees. The surety bond is filed for the benefit of consumers who may be damaged by defective construction or license violations, and serves as a wage guarantee for those persons employed by a license. The surety bond must be written on the CSLB bond form by a surety company licensed and authorized by the California Department of Insurance to engage in surety business. In addition to the California contractor's license bond, a "bond of qualifying individual" (BQI) is required if the applicant is a responsible managing employee (RME). This secondary license bond is also required if the applicant is a responsible managing officer, responsible managing manager, or responsible managing member with less than ten percent ownership of the shares or equity of the corporation or limited liability company (LLC) that he or she manages. There are some waivers given for the BQI bond. Except for the exception of RMEs, an exemption may be giving to those managing officers, responsible managing managers or responsible managing members that own ten percent or MORE of the shares or equity in and applicant corporation or limited liability company (LLC). Additionally, an $100,000 LLC employee/worker bond must be filed for LLC applicants only. Questions about licensing may be directed as follows:
Contractors State License Board
9821 Business Park Drive
Sacramento, CA 95827
(800) 321-CSLB (2752)
The CSLB recommends that operators conduct a California contractor license bond "check up" periodically through the automated phone response system or the Board portal. The CSLB adivses, "most bond renewals and license renewals are not on the same cycle, so do not assume that upon license renewal that the surety bond also automatically renews.
California surety bond leader, Surety One, Inc. is a specialist in providing for the bonding needs of mechanical contractors. We offer this class of surety bond and performance bonds to all applicants in every state where contractors must be bonded. Although personal credit is a factor in surety bond underwriting, we have programs to fit EVERY credit condition. Call (800) 373-2804, email Underwriting@SuretyOne.com or click here for a live chat regarding a California contractor's license bond application or to discuss other California surety bonds.
Surety bond application review and quoting are free of charge. There is no obligation to purchase.