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California Contractors License Bond

Contractors License Bond inCA - State Capital Building  in Sacramento, CA

One of the most common types of surety bond is the contractor license bond. This type of bond is an agreement between the surety, the contractor, the public, and the state where the contractor is seeking licensure. A California contractor license bond protects the public while also helping to build public trust of contractors by providing a form of deterrent of unethical behaviors and actions by the contractor.

The contractor license bond is like a certification, a guarantee to the state that you as a contractor will always work to high professional and ethical standards. Contractor license bonds also protect the public. They show people that you and the business that hired you and your company are reliable, will not do them harm, and will provide professional services. If anyone is harmed by an unethical action or decision during a project, they know they can file for financial recompense against the bond.

What Is a Contractor License Bond and What Does It Cover?

A contractor license bond is a financial promise to adhere to state laws and regulations when working to complete a job for customers. If a contractor fails to do that, either by not completing the job or failing to complete the work in accordance with applicable regulations, a claim can be made on the bond. Valid bond claims are paid by the surety backing the bond. The surety will then seek to recover the amounts paid settling the claim from the contractor.

A contractor license bond also covers other unethical actions. Non-payment of subcontractors, damage or theft of materials by a contractor and damage to property caused by a contractor can result in claims on the contractor license bond.

While the contractor license bond is in place primarily to protect the public, the bond is a valuable tool for contractors because it builds confidence with customers. It assures customers that, even if there is a problem with the project, the contractor will most likely work to rectify the issues. Customers would rather hire a bonded contractor rather than an unlicensed freelance contractor.

How to Get a Contractor License Bond in California

Contractors can purchase California contractor license bonds from a surety bond company licensed through the California Department of Insurance. The bond must be renewed for as long as the contractor remains licensed. Getting the bond is usually as simple as a general surety bond application, a credit check and paying the premium. The whole process can take as little as a day.

The Contractors State License Board (CSLB) of California requires contractors to have in place an active $15,000 surety bond. The bond is a requirement for new licensure, license renewal and reactivation of a license.

A Bond of Qualifying Individual may also be required for some contractors. These bonds, when required, are in addition to the contractors bond. The required bond amount on these bonds is $12,500.

The CSLB also has one additional bond requirement for contractors, the Disciplinary bond. This bond is required to reinstate or reissue a license that was revoked due to a violation of CA Contractors License law. The Disciplinary bond amount is determined by the Registrar. The amount can range from $15,000 to $150,000. The Registrar requires these bonds to be current for at least 2 years.

The Cost of California Contractor License Bonds

Because California contractor license bonds are underwritten individually, their cost varies from applicant to applicant. The final cost depends mostly on the applicant's credit and to some extent their record as a contractor. Contractors with stronger credit can expect their bond cost to be lower that an applicant with challenged credit. The typical price range for these bonds is from 1.5% to 3% of the bond amount.

California Contractor License Bonds by Viking Bond Service

You can trust Viking Bond Service with your California contractor license bond needs. For more than 15 years, we've been helping ensure that our customers stay compliant with California bonding regulations. Our quick, easy contractor license bonding service helps you get the bond you need, with no confusion or headache. Our experienced team of licensed surety bond agents will help you get the California contractor license bond you need at a great price. Get started with an online quote request now.

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