A California Contractor License Bond Guide: What You Need to Know

In California, all businesses or individuals who construct or alter any building, highway, road, parking facility, railroad, excavation, or other structure must be licensed by the California Contractors State License Board (CSLB) if the total cost exceeds $500. As such, anyone who wants to become a serious contractor must obtain a California contractor license to practice. One important aspect of this is obtaining a contractor license bond. This article will go over the basics and FAQs of contractor licensing bonds in California, including the requirements, new Senate mandates, and an overview on how claims can be filed against this bond.

What is a contractor license bond?

In order to obtain a contractor license in California, contractors are required to submit either a surety bond or cashier's check to the CSLB (Contractors State License Board). This bond or check is meant to protect consumers who may suffer from faulty construction or violations of state license laws by contractors, as well as employees who have not been paid their wages.

Typically, contractors opt for a surety bond, also known as a "contractor license bond," where a surety company guarantees payment of damages if the contractor breaks state license laws. Additionally, contractors who have faced disciplinary actions may need to obtain a separate bond referred to as a "disciplinary bond." Some license qualifiers, including responsible managing employees, are also obligated to have a $25,000 bond on record with the CSLB, called the bond of qualifying individual.

What are the requirements for a contractor license bond in California?

According to the CSLB, a contractor license bond must meet all of the following state requirements.

  • The bond must be written by a surety company licensed through the California Department of Insurance.
  • The bond must be in the amount of $25,000.
  • The business name and license number on the bond must correspond exactly with the business name and license number on the CSLB's records.
  • The bond must have the signature of the attorney-in-fact for the surety company.
  • The bond must be written on a form approved by the Attorney General's Office.
  • The bond must be received at the CSLB's Headquarters Office within 90 days of the effective date of the bond.

Who needs a contractor license bond?

Any contractor who wishes to obtain a license, reactivate a previous license, or renew their existing license must obtain a contractor license bond in the state of California.

What happens if I don’t obtain a license (or a license bond)?

Contracting without a license in California is illegal. According to the CSLB, those who are caught contracting without a license will likely have to appear before a Superior Court judge. They will face misdemeanor charges, which in many cases can carry a potential sentence of up to six months in jail and/or a $5,000 fine. In addition, perpetrators may be subject to an administrative fine of $200 to $15,000.

What is the required bond amount?

The current mandated bond amount for contractor licenses is now increased to $25,000. This bond amount was instated on January 1, 2023, as a result of the Senate Bill 607.

It is important to note that this amount is not per project, but rather the total sum available to cover any damages incurred across multiple jobs during the bond's validity. Once the bond is depleted, contractors must obtain a new one to maintain their license.

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What happens if I purchased my contractor license bond before January 1, 2023?

According to the CSLB, contractors with a license bond on file are responsible for making sure that their contractor bond is adjusted to the new, increased amount.

There are two scenarios:

  1. If you have a cashier’s check in lieu of a surety bond:

Contact Licensing@cslb.ca.gov about increasing your bond.

  1.  If you already have a contractor’s bond through a surety company

Contact your surety about increasing your bond. However, if the surety company you have already purchased your bond from is included in the list below, your bond amount will be increased automatically to $25,000, as per the CSLB regulations.

Sureties under which your contractor license bond has increased automatically (list is current as of Feb. 10, 2023:

  • Allegheny Casualty Company
  • American Alternative Insurance Corporation
  • American Casualty Company of Reading Pennsylvania
  • American Contractors Indemnity Company
  • American States Insurance Company
  • Arch Insurance Company
  • Argonaut Insurance Company
  • Aspen American Insurance Company
  • Atlantic Specialty Insurance
  • Berkley Insurance Company
  • Berkley Regional Insurance Company
  • Berkshire Hathaway Specialty Insurance Company
  • Bond Safeguard Insurance Company
  • Business Alliance Insurance Company
  • Capitol Indemnity Corporation
  • Cincinnati Insurance Company (The)
  • Colonial Surety Company (only the contractor bond endorsement)
  • Continental Casualty Company
  • Continental Insurance Company (The)
  • Contractors Bonding and Insurance Company
  • Employers Mutual Casualty Company
  • Endurance Assurance Corporation
  • Everest Reinsurance Company
  • Federal Insurance Company
  • Fidelity and Deposit Company of Maryland
  • Financial Pacific Insurance Company
  • First National Insurance Company of America
  • Granite Re, Inc dba Granite Surety Insurance Company
  • Gray Casualty & Surety Company (The)
  • Gray Insurance Company (The)
  • Great American Insurance Company
  • Great Midwest Insurance Company
  • Hanover Insurance Company (The)
  • Harco National Insurance Company
  • Hartford Fire Insurance Company
  • Hartford Insurance Company of the Midwest
  • Hudson Insurance Company
  • Jet Insurance Company
  • Lexon Insurance Company
  • Liberty Mutual Insurance Company
  • Markel Insurance Company
  • Merchants Bonding Company (Mutual)
  • National Fire Insurance Company of Hartford
  • Nationwide Mutual Insurance Company
  • Navigators Insurance Company
  • Old Republic General Insurance Corporation
  • Old Republic Surety Company
  • Pacific Indemnity Company
  • Philadelphia Indemnity Insurance Company
  • Platte River Insurance Company
  • RLI Insurance Company
  • Safeco Insurance Company of America
  • State Farm Fire and Casualty Company
  • St Paul Fire and Marine Insurance Company
  • SureTec Insurance Company
  • Swiss Re Corporate Solutions America
  • Swiss Re Corporate Solutions Premier
  • The Guarantee Company of North America USA
  • The North River Insurance Company
  • The Ohio Casualty Insurance Company
  • Travelers Casualty and Surety Company
  • Travelers Casualty and Surety Company of America
  • Trisura Insurance Company
  • United Fire & Casualty Company
  • United States Fire Insurance Company
  • United Surety Insurance Company
  • Universal Surety of America
  • US Specialty Insurance Company
  • Vigilant Insurance Company
  • Wesco Insurance Company
  • Westchester Fire Insurance Company
  • Western National Mutual Insurance Company
  • Western Surety Company
  • XL Specialty Insurance Company
  • Zurich American Insurance Company

How much do I have to pay for a contractor bond in California?

The cost of a contractor license bond depends on two numbers: the bond amount, which is $25,000 in California, and the premium rate, which is a personalized percentage of the bond amount that a contractor must pay to obtain the bond. This premium rate is often determined by multiple factors, the most important being the contractor’s credit score.

To get a contractor license bond, a contractor does not need to pay the full bond amount, but rather only the premium, which is calculated as: 

Premium = Bond Amount ($25,000) * Premium Rate

In California, the premium rates for the contractor license bond ranges from 0.5% to 5%, depending on the bondseeker's creditworthiness. This translates to a range of premiums between $125 to $1,250 per year, renewed annually. 

Who can make a claim against a contractor bond?

Claims against a contractor bond can be made by the following parties:

  • Homeowners who have entered into agreements for home renovations or construction of single-family dwellings that have been damaged due to violations of state license laws by the licensed contractor.
  • Individuals who have suffered damages as a direct result of intentional and deliberate violations of state license laws or fraudulent activity committed by the licensee during the execution or performance of a construction contract.
  • Employees of the licensed contractor who have not been paid their owed wages.
  • Any person or entity that has suffered damages due to the contractor's failure to provide eligible employees with fringe benefits.

How does a consumer file a claim against a bond?

To file a claim against a bond, consumers should reach out to the contractor's surety company and provide a comprehensive written description of the issue, along with supporting documents such as the contract and any other pertinent information. If the consumer is not satisfied with the surety company's response, they have the option to take the contractor to small claims court for amounts up to $10,000. Claims exceeding $10,000 must be filed in a superior court.

What should a contractor do if a claim is filed against their bond?

If a contractor receives notification from their surety company regarding a filed claim against their bond, it is crucial to promptly respond to the surety. Contractors should provide a detailed explanation of their position and submit all relevant documentation. Additionally, if a complaint has been lodged with the CSLB, contractors should respond fully and promptly, providing the board with all requested information for the duration of the investigation.

The surety company will conduct its own investigation into any claims filed against the bond, while the CSLB will investigate any complaints against the contractor's license. Often, the issues involved in these two matters are interconnected. Both the surety company and the CSLB will independently address and resolve the respective issues within their jurisdictions.


To sum it up, the California Contractor License Bond is a necessary requirement for all contractors looking to get licensed in the state. It is important for bond seekers to understand the pricing, where to get a surety bond, and the requirements set forth by the CSLB. Finding a reputable and knowledgeable surety broker who specializes in contractor license bonds is crucial in obtaining the right bond for the contractor's needs, and SuretyNow is here to help if you run into any questions. Happy contracting!