What are the Requirements for California Contractor Bonding?

A contractor’s license bond is also known as a construction bond. It is a necessity for any construction work, including almost all government projects and public works. The bond entitles the contractor to abide by the terms of the license and the terms of the contract. If the contractor fails to perform his duties in terms of the contract, both the contractor and the guarantor are liable.


There are special conditions you need to meet the country’s requirements of the contractual obligation. Not only does the California contractor bond have a cover price, but depending on your license status, you may need an additional type of bond with its coverage value. This is an overview of the contractor’s requirements for the state of California for each type of bond.

California Contractor License Requirements


California law requires that any person or commercial enterprise as a licensed or contractor of construction work in excess of $ 500 of total labor and building materials must have a contractor’s license. Individuals exempted from this requirement are employees of the business, are remunerated, and are subject to supervision by the employer or supervisor. Owners-builders who do their work on their site or who hire workers to work on their site are also free.


Contractors must obtain their California Contractors State License Board (CSLB) licenses. Although there are requirements for testing, certification, registration, reporting, and security, you may have to opt-out of testing. At least four years of travel experience during the last 10 years of regular construction or a particular field is a prerequisite for testing.


Without experience, a person can be a partner with the RMO (Responsible Chief Executive Officer) or the RME (Responsible Managing Officer), receive an exemption from testing, or form a licensed contractor company. However, the requirements for a California contractor bond still apply to an individual or a business contractor.


Types of California contractor bonds and requirements


Depending on your role in the construction project, you need to have some form of bond contractor:


California Contractor License Bond


California Contractor License bond is $ 15,000 and costs between $ 102 and $ 450 per year. School, experience, and other factors determine the cost. This is also known as a payment bond and is required for all California contractors. If you do not comply with the building contract, the bond allows the client to file a claim against it to cover the damage. This type of California bond contractor guarantees the eligibility for licensing and re-activating an invalid license or renewing the license.


Other than that should be $ 15,000, the requirements are:


It must be registered with the licensed collateral of the California Department of Insurance. The business name and license number must match those in the CSLB records. Must be a signature attorney for a collateral company. It must be written on a form approved by the Attorney General. The CSLB Head Office must receive it within 90 days from the first date of the bond.


Eligible Individual Bond


Qualifying Individual Bond is an RME bond valued at $ 12,500 for individuals who own less than 10 percent of a business.


The same requirements as applicable to the California Contractor Bond, except that it must be valued at $ 12,500.


Responsibility for Disciplinary Services


A disciplinary Bond is an additional security bond for licensed contractors. It has a limit of between $ 15,000 and $ 150,000.




It should only be included as an additional bond; it will not be replaced or combined with any other obligations. It must have a bond amount determined by the Registrar and the amount is based on how serious the breach is, but not less than $ 15,000 or more than ten times the contractor’s bond value. It must remain current and on file with the Registrar for a minimum of two years, although it may take longer to complete.


The other two main types of contractor bonds are performance bonds and performance bonds. They are not dependent on the government but are generally required by the government in public projects.


Any other type of bond may be required for a construction project, such as:


Maintenance bond: Also known as a guarantee bond, it protects the owner from errors and defects in the materials of construction, construction, and design of inadequate or defective work. Purchase bond: This collateral bond ensures that the (primary) supplier will supply certain required goods or items by a specific date according to the contract.Bond bond: A type of construction bond that serves as a guarantee that the engineer will complete community development. in accordance with quality standards, applicable regulations, and over a specified period depending on the contract. Site development bond: A bond for the repair or improvement of an existing site or building that guarantees that the work will be completed in accordance with the contract. LLC Employee / Employee Bond: LLC mortgage bond valued at $ 100.00 and credit insurance limited between $ 1,000,000 and $ 5,000,000.


Without experience, a person can become a partner with the RMO (Responsible Chief Executive Officer) or the RME (Responsible Managing Officer), obtain an exemption from testing, or form a company with a licensed contractor. However, the requirements for a California contractor bond still apply to an individual or a business contractor.

Leave a Reply

Your email address will not be published. Required fields are marked *