More than seven million people work in construction nationwide, including a large portion based out of California. As one of the biggest, most populated, and most heavily-built states in the country, California has a massive construction industry. It’s also a heavily regulated industry, which is why the hundreds of thousands of contractors working throughout California need a license issued by the California Contractors State License Board (CSLB).
Contractors who operate without a license could be subject to fines and fees, as well as the risk that California prohibits them from ever obtaining a license, making it impossible for them to work legally. Failure to get a license has deep penalties that no contractor wants to face. Plus, statewide enforcement efforts make it likely that anyone operating without a license will be found out and penalized. Therefore, it’s vital that anyone who requires a CSLB license follow the steps to get one, and keep the license in good standing. Here’s what the CSLB requires before granting a license:
- You must be 18 years of age or older.
- You must have a valid social security number.
- You need at least four years verifiable experience in the construction industry working as a Journeyman, Foreperson, or Supervising Employee. Classes taken at an accredited technical school can count towards this requirement – eg. two years schooling can replace two years experience.
- You must pass an exam about California business and law requirements, and may have to pass another exam relevant to the specific type of contractor license you’re pursuing.
- You must show proof of a CSLB license bond, otherwise known as a California contractor license bond.
- You must show proof you have worker’s compensation insurance unless you have no employees.
- You must submit all application documents and pay the related fees.
Why does CSLB require bonding
Contractors have to jump through many hoops to obtain a CSLB contractor license, but most of the requirements are fairly straightforward. One that isn’t so simple (and that we get questions about all the time) is the CSLB license bond requirement.
To begin with, California requires contractors to have a surety bond as a way to protect the public from unscrupulous contractors who don’t follow legal or ethical business practices. If someone feels they have suffered damages caused by the contractor they hired, they may file a claim against the CSLB license bond seeking compensation. The surety company that backs the bond guarantees payment for valid claims. The surety also guarantees that the contractor will be held financially responsible – the contractor must pay the surety back for any claims it settles, and pay for interest and fees.
In that way, California contractor bonds discourage contractors from breaking the rules and provide a path to justice for anyone their rule breaking hurts. That’s why getting a CSLR license also requires getting a contractor bond. Specifically, contractors need a $15,000 surety bond to fulfill the license requirement. They may also need additional bonds, such as a contractors disciplinary bond or a LLC Employee/Worker Bond.
If you have questions about whether you need a surety bond, what kind, and in what amount, make sure you get the right answers. You don’t want bond problems to jeopardize your business. The team at Viking Bond Service is here to help you understand your exact bond requirements, and meet those requirements quickly, easily, and at low cost.
How to get a CSLB license bond
With a partner like Viking Bond Service, getting a contractor bond in California or any other state couldn’t be easier. Or faster – you can expect to get a quote back within 24 hours in most instances. Here’s how it works: You will need to complete a standard bond application, submit to a credit check, and provide any additional documentation (like a financial statement) the surety agency asks for.
Underwriters at the surety agency will evaluate your application documents, gauge your credit risk, and quote you a bond price. Expect the bond to cost a small percentage of the full value. Bad credit will lead to high premiums, but Viking Bond Service has a special bad credit surety bond program to help more California contractors obtain the surety bond they need regardless of their credit score or history.
Once you have an active bond, you receive a document proving you’ve met the CSLB license bond requirement. You will need to keep that bond active and in good standing for as long as you remain licensed. Plan to renew the bond every 12 months. To renew, you will submit to a new credit check and pay the premium, which could be higher or lower than the previous premium based on changes to your credit. That’s how to keep the bond active. Keep it in good standing (and do the same for your business) by abstaining from any behavior that could cause claims against the surety bond.
Viking Bond Service – serving all California contractors
We serve contractors across California, and we issue all the surety bonds a contractor may need to get a license, win a contract, or comply with state laws and courts. Make Viking Bond Service your bond partner from the start. Contact us here with any questions, or call us at 1-888-278-7389 to speak directly with a bond expert. You can request a quote at your convenience.