Contractor License Bond

License and permit bonds, also known more simply as “license bonds” or “permit bonds,” are a specific type of commercial bonding. Government agencies require business owners in certain industries to purchase these bonds before they can be legally licensed. They protect consumers by guaranteeing businesses adhere to laws and other regulations enforced by federal, state and local government agencies.

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Even though they’re actually a type of license and permit bond, contractor license bonds are often mistakenly grouped in with contract bonds since they’re used by construction professionals. Contractors must purchase these bonds before they can receive their contractors licenses at the state, county and/or city level. These bonds ensure that contractors follow all applicable licensing laws and regulations.

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A lot of companies quickly realize their insurance needs go beyond basic liability and commercial auto insurance. Some jobs require specific types of coverages such as contractors general liability insurance that gives you protection that may fall outside of basic coverage.

A Contractor’s Bond must be in place before CSLB can issue an active license, reactivate an inactive license, or renew an active license. (Business and Professions Code Section 7071.6).

The bond is filed for the benefit of consumers who may be damaged as a result of defective construction or other license law violations, and for the benefit of employees who have not been paid wages that are due to them.

Effective January 1, 2016, the required amount of a contractor’s bond or cash deposit with CSLB in lieu of a contractor’s bond is $15,000.

The bond for a qualifying individual is $12,500.

Requirements for the Contractor’s Bond:

  • The bond must be written by a surety company licensed through the California Department of Insurance.
  • The bond must be in the amount of $15,000.
  • The business name and license number on the bond must correspond exactly with the business name and license number on the CSLB’s records.
  • The bond must have the signature of the attorney-in-fact for the surety company.
  • The bond must be written on a form approved by the Attorney General’s Office.
  • The bond must be received at the CSLB’s Headquarters Office within 90 days of the effective date of the bond.

For More Information Visit CSLB.CA.GOV

Contractors General Liability Insurance

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 Tools & Equipment Insurance

Bid bonds make sure that contractors submit serious bid proposals. These bonds reassure project developers that bidders have the financial credentials necessary to accept the job. If a bid is selected and the contractor declines the job or retracts the bid, the project developer can make a claim on the bond to recoup the difference between that bid and the next-highest bid. Learn More

Property Insurance

Performance bonds guarantee that contractors complete projects according to contractual terms. If a contractor fails to do so, the project developer can make a claim on the bond to access funds that can be used to pay a second contractor to finish the job. The Federal Miller Act requires that performance bonds be used on all federally funded projects worth $100,000 or more. Learn More

Commercial Auto Insurance

Business service bonds protect consumers from the potential theft that could be committed by company employees who work in clients’ homes or offices. Business service bonds are optional insurance products that are purchased by many different types of businesses, such as. Learn More

Surety Bonds

  • Contractor License Bonds
  • Contract Bonds
    • Bid Bonds
    • Performance Bonds
  • Business Bonds
    • Employee Dishonesty Bonds