What a contractor license bond is
Some states, and many cities and counties, make contractors post a bond to get or renew a license. It protects customers, workers and the public if the contractor breaks the licensing laws, for example by abandoning a job or not paying workers. The contractor repays the surety for any claim it pays.
In California
Every California contractor license requires a $25,000 contractor's bond on file with the Contractors State License Board, under Business and Professions Code Section 7071.6. The amount rose to $25,000 on January 1, 2023.
- The bond is required for issuance, reinstatement, reactivation and continued valid use of a license.
You need this bond if you're
- A contractor applying for a new license
- A contractor renewing or reactivating a license
- A business changing its entity type or qualifier
- A contractor starting work in a city or county that requires its own bond
What the surety looks at
Basic business and owner details. Most license bonds need a credit check but no financial statements.