Contractor’s State License Board Surety Bonds

Contractor’s State License BoardThe Contractor’s State License Board is more commonly referred to by the acronym CSLB. The CSLB is there to protect consumers who require the help of a construction professional. This is done by licensing and regulating the state’s construction industry. They work under the Department of Consumer Affairs.

The CSLB licenses more than a quarter of a million contractors in 44 different classifications. In order to help them enforce the rules and regulations of these licenses, they may require the use of a surety bond. These bonds offer financial protection in the event that a contractor disobeys, either wittingly or inadvertently, any law or regulation that falls under the license.

Common types of surety bonds that are required by the Contractor’s State License Board include:

California Contractor’s License Bond

All professional contractors in the state of California must have a contractor’s license. In addition to the required education and experience, the license mandates that an applicant must also carry a Contractor’s License Bond. The minimum bond amount should be set at $15,000.

California Bond of Qualifying Individual

In addition to the California Contractor’s License Bond, some contractors may also need to pull a Bond of Qualifying Induvial. This can be needed to reactivate their license or maintain an already existing license. The bond is required to be at least $12,500 and is needed if the license requirements are overseen by a Responsible Managing Employee (RME) who does not own at least 10% of the voting stock of the corporation or business.

California Contractor LLC Employee Surety Bond

For a long time, an LLC was not allowed to obtain a contractor’s license in California. In 2011, the law changed, which allowed a limited liability company to get a contractor’s license if certain criteria were met. One of these requirements is that the LLC must hold a Contractor LLC Employee Surety Bond of at least $100,000. The purpose of the bond is to protect employees and contractors from any loss of pay or malpractice that may be the fault of the LLC.

California Disciplinary Contractors’ License Bond 

If, for whatever reason, a contractor loses their contractor’s license, they must then hold a Disciplinary Contractor’s License Bond. This bond is needed if the contractor wishes to reinstate, reissue, or reapply for a new license. The bond amount must be a minimum of $15,000.

How to Apply for a Surety Bond

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