Contractor’s License Bond - Frequently Asked Questions
Important Notice
The contractor’s bond and the qualifying individual’s bond
are scheduled to be increased to $12,500 on January 1, 2007
- What is a License Bond?
- Before an active contractor’s license can be issued or renewed, or a
previously inactive license made active, the licensee must have a
contractor’s license bond, or an approved alternative to the bond on file
with the Contractors State License Board (CSLB). The contractor’s license
bond shall be in the amount of $12,500.
In addition, you must have a $12,500 Bond of Qualifying Individual, or an
approved alternative to the bond, on file for each responsible managing
employee (RME). You must also have a $12,500 Bond of Qualifying Individual on
file for each responsible managing officer (RMO) unless the RMO owns
10-percent or more of the voting stock of the corporation.
If the license is inactive, neither the contractor’s license bond nor the Bond of
Qualifying Individual is needed.
- How long does it take to issue a bond?
- Your submission is underwritten and a contractor’s license bond is
issued the same day we receive your signed application and premium check.
Please be advised that prior claims history or CSLB disciplinary action may
delay issuance.
- Where does the original bond go?
- 1) Existing Licenses: The original bond can be filed directly with the
CSLB or returned to you so you can file it with the CSLB. In either case you
will receive a copy of the bond for your records.
2) New Licenses: Please be advised that the original bond MUST accompany
your CSLB final paperwork and license fee. Therefore, the original bond will
be returned to you for filing with the CSLB. If you wish SCP to file the
bond directly with the CSLB, kindly enclose the necessary CSLB paperwork and
license fee with your bond application and premium payment. In either case
you will receive a copy of the bond for your records.
- How do I change information of the bond?
- All Change Requests must be in writing,
either by a letter or fax. Once a bond is filed with the CSLB, we cannot
change the following information:
1) Effective date more than 30 days prior to current effective date (except
for cash release riders)
2) Entity on the bond. For example, from a sole to corporation or
partnership. The Contractor’s License Law requires a new license be issued
in these cases.
- Can a bond be transferred from one license to another?
- Unfortunately no. The Contractor’s License Law will not allow a bond,
once filed, to be transferred to another license.
- Do the license and bond have to renew at the same time?
- No, just concurrently. You need to have an active bond on file with the
CSLB to maintain an active license. Also, the bond is “continuous” in
nature, i.e., it stays on your license until cancelled or replaced. The CSLB
does not know when the bond’s actual renewal date is; only that it is in
force. You need to have an active bond to maintain an active license.
- How do I cancel a bond?
- Cancellation must be in writing, either by letter or fax, and will be
processed upon receipt. Please be advised however, that the Contractor's
License Law requires the bond to remain in force for 30 DAYS AFTER THE CSLB
RECEIVES THE SURETY’S CANCELLATION REQUEST. This means any return premium is
calculated from the 30th day after receipt of the written request to cancel
the bond. Any unearned premium is return to the agent or, if no agent is
involved, directly to the contractor on the 5th of the month following
cancellation.
- I am changing my existing license from a sole entity to a corporate
entity. Can I use the same bond I have now?
- No, when applying for a new entity and maintaining the same license
number you must apply for a new bond. Once the CSLB reissues the license and
posts your new bond, you may contact us so we can cancel the previous bond
and refund the unused portion back to you or your agent.
- I need to change my qualifying officer on the corporate license. Do I
need to do anything with the bond?
- Yes, we need to have the new qualifier sign the Indemnity Agreement on
the Bond Application. Please see Bond
Application Information to contact us or download the bond application.
Have your new qualifying officer sign the Indemnity Agreement and return it
to us along with written explanation. We will document your file accordingly.
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