Contractor License Bond - P&G Insurance best rates and coverage

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Contractor License Bond

Contractor License Bonds

As of May 3, 2023, the Contractors State License Board (CSLB) licenses and regulates 284,200 contractors in the state of California. All contractors are required to carry the contractor license bond that is available at California Contractor Insurance Services.

In April of 2023, there were 4,875 applicants approved for new or revised contractor licenses. All new and some revised applicants are required to post the contractor bond prior to receiving a license. Call or contact us directly HERE.

License Bond Cost in California?

The bond costs between $109 and $2000 depending on the personal credit, license history, and classification of the contractor.

*Prices shown are for the one year term and are based on several factors including personal credit, license history, years in business, and active licensing and bonding. Not all available pricing tiers are shown. Rates do not constitute an offer of bonding and are subject to change at any time.

What About Unlicensed Contractors?

Unlicensed contractors do not carry the contractor’s bond, thus consumers do not receive protection from the bond insurance requirement. The CSLB receives nearly 20,000 complaints regarding unlicensed contractors annually. Contracting without a license is a crime punishable by fines and imprisonment (Business & Professions Code 7028).

The CSLB’s Statewide Investigative Fraud Team (SWIFT) performs monthly sting operations throughout California, resulting in hundreds of citations and usually three to five felony charges with each successful sting. In 2017 alone the CSLB helped recover more than $47 million in ordered restitution for consumers. We encourage all consumers to check a contractor’s license status with the CSLB prior to accepting the contract. Follow us on facebook for latest news and offers.

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How does a California contractor bond work?

The contractor’s bond must be issued by an insurance carrier admitted by the California Department of Insurance. The insurance company issuing any surety bond will also be referred to as the “surety company” or the “bond company”. Contractor license bonds refer to the contractor as the Principal, the surety bond company as the Obligor, and the CSLB as the Obligee.

The surety company provides the CSLB a guarantee (the surety bond) that the customers, vendors, suppliers, and employees of a licensed contractor will receive payment for financial damages due to a violation of California Contractor License Law, up to a limit of $25,000 (“penal sum” or “bond amount”). The bond company also directly receives claims from the public and determines the validity of claims. Ultimately, contractors are responsible for their actions and required by California Contractor License Law to reimburse the surety company for any payments made under the bond or they’ll face indefinite license suspension.

Violations triggering a bond payout may include a contractor failing to pay employees or vendors, abandoning an uncompleted job or failure to repair faulty workmanship.

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