Whether you’re new to the construction industry and applying for a license or renewing your license, be sure you know the Golden State’s bonding requirements. A Surety bond ensures that contractors operate in compliance with the laws and regulations of the state, protects clients against financial damages due to improper or incomplete work, and ensures that subcontractors and suppliers are paid. The California State License Board’s (CSLB) Statewide Investigative Fraud Team (SWIFT) performs regular checks to identify and penalize unlicensed contractors operating without an essential bond.

Here’s what you need to know:

New Contractors

  • You must be legally licensed and meet specific guidelines to continue operating within the state. 
  • Only construction businesses with licenses can obtain proper work permits in the state.
  • There are four general types of contractor licenses in California: General Engineering Contractor, General Building Contractor, Residential Remodeling Contractor, and Specialty Contractor. The type of work you do determines which license you need.
  • You must purchase a Surety bond in the amount of $25,000. 
  • The bond must have the same business name and license number as your CSLB license number.
  • The bond must be received at the CSLB's Headquarters Office within 90 days of the effective date of the bond.
  • Bonds are available through a Surety company or agent. 
  • The bond cost depends on various factors, including your credit history and business financials.
  • Additional bond types may be required
    • Bond of Qualifying Individual for when the qualifier is a responsible managing employee OR when a responsible managing member, manager, or owner has less than 10% stock ownership; bond amount: $25,000
    • An LLC Employee/Worker Bond when the business entity is licensed as an LLC; bond amount: $100,000; additionally a $1 million Liability policy is required

Contractors Maintaining Compliance

  • Once you have your license, you must maintain it with the CSLB. 
  • Active licenses expire every two years, while inactive licenses expire every four. 
  • The CSLB will send a renewal application about 60 days before your license expires. 
  • The CSLB recommends ordering a renewal online if you don’t receive a renewal application within 45 days of your license’s expiration date. All payments must be made online or via mail.
  • Your Surety company will contact you to renew your bond. However, keeping tabs on your bond’s expiration date is best to ensure it doesn’t go out of date. The new Surety bond’s start date should be the same as the cancellation date of your old bond.

CCIS specializes in California contractor license bonds and can provide you with a quick quote. 

Please note that bonds are subject its terms and statutory requirements. Thus, benefits of the bond can only be afforded based on the terms of the bond and as provided by applicable state or federal law.  Further, please review the appropriate state statutes and regulations or consult your legal professional for business compliance.