California License Bonds

  • Home
  • California License 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 license bond needs.

What Are They?

California, like most states, requires people and companies in certain trades and professions to be licensed in order to do business within the state. California license bonds are a type of surety bond specifically required as part of the licensing process in the state of California. License bonds do the following:

  • Serve as a guarantee that licensed individuals/companies will comply with all applicable laws, rules, regulations, and standards as identified in the surety bond agreement
  • Ensure that funds will be available to compensate any party submitting a valid claim for financial harm caused by the unlawful or unethical actions of a bonded individual/company

California license bonds also help maintain high-quality standards in the industries that help power the state’s economy.

Who Needs Them?

Different occupations and businesses are licensed by different state agencies in California. Many licenses are granted through the various state license board operating within the California Department of Consumer Affairs (CDCA).

The easiest way to find out whether you will need a license to operate a certain kind of business in California is to check the CareerOneStop website sponsored by the U.S. Department of Labor. It allows you to search by state for a particular career or profession and find out the licensing agency and specific licensing requirements, including any license bond needed.

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

How Do They Work?

A California license surety bond agreement is a legally binding contract among three parties:

  • The California agency issuing the license and requiring the license bond is the “obligee”
  • The person applying for a new or renewal license and required to purchase the license bond is the “principal”
  • The bonding company underwriting and issuing the bond is the “surety”

Every license bond is issued with a particular “term” (the length of time before it expires) and must be renewed when the license itself is renewed. The obligee establishes the required bond amount, also known as the bond’s “penal sum.”

In issuing a bond, the surety is establishing a line of credit that can be tapped in the future to pay valid claims against the bond. Any violation of the terms of the surety bond agreement that causes someone a financial loss can result in a claim being filed against the bond by the injured party.

When a claim is filed, the surety will determine whether the claim is valid. The surety may attempt to negotiate a more favorable settlement, but if unsuccessful, the surety will pay the claim on behalf of the principal. That payment is made from the principal’s line of credit, creating a debt that the principal must repay to the surety, typically in installments.

What Do They Cost?

The annual premium for a California license bond is a small percentage of the bond’s penal sum. The surety sets the specific premium rate for each principal, based primarily on the principal’s personal credit score.

A principal with good credit is more likely than one with poor credit to repay the surety without problems. With good credit, the principal usually pays the standard market rate of 1% to 3%. Those with poor credit could pay a higher premium.

Get a Quote

You can count on our surety bond professionals to get you the California license bond you need at a competitive rate.