California Contractor Bonds

  • Home
  • California Contractor Bonds

Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your California contractor bond needs.

What Are They?

A California contractor bond is a type of license and permit bond. Without one, you will not be able to obtain, retain, or renew your California contractor license issued by the California Contractors State License Board (CSLB).

The bond is your guarantee to operate your contracting business in compliance with all applicable statutory rules and regulations (specifically, Division 3, Chapter 9 of the Business and Professions Code).

A California contractor bond provides financial protection for:

  • Consumers who have suffered a financial loss as a result of a contractor’s violation of contractor license laws
  • Employees who have not been paid what is owed them

Who Needs Them?

If you want to be licensed and stay licensed as a contractor in California, you must purchase a $15,000 California contractor surety bond and renew it when it expires.

Speak with a Surety Bond Professionals agent today to discuss your bonding needs.

How Do They Work?

The surety bond agreement is a legally binding contract between three parties:

  • CSLB, the party requiring the bond (known as the “obligee”)
  • The contractor purchasing the bond (the “principal”)
  • The surety bond company underwriting and issuing the bond (the “surety”)

The terms of the agreement specify the conduct required of the principal in order to avoid claims against the California contractor bond. Any violation of those terms by the contractor can result in a claim being filed against the bond by the injured party.

The surety will make sure a claim is valid and try to negotiate an amicable settlement before paying the claim. It’s common practice for the surety to pay a claim upfront on behalf of the principal to allow the principal time to gather the funds. The principal is legally responsible for paying all valid claims and therefore must reimburse the surety in full, but is given some time to do so, often in the form of a schedule of installment payments.

What Do They Cost?

The premium you will pay to purchase a California contractor bond is a small percentage of the required bond amount. While CSLB has established the required bond amount at $15,000, the specific percentage, or premium rate, is determined by the surety on a case-by-case basis.

The surety’s primary considerations are your personal credit score and license history.  Your license history is an indicator of the likelihood of claims being incurred, and your credit score is used to assess your willingness and ability to reimburse the surety for any claims paid on your behalf. With a high credit score and good license history, your premium rate could be as low as 1-2%.

Get a Quote

Our experienced surety bond agents will get you the California contractor license bond you need at a competitive rate.