California CSLB Contractors License Bond
There are many regulations for contractors in the Golden State. In order to get your license, you will need one or more surety bonds. These bonds protect your customers and subcontractors or employees by guaranteeing that you will comply with all state laws and regulations. Here is an overview of California's four contractor bond types and some guidelines to help you determine which policies you need.
Get a Contractor License Bond for $150–$2,500 a year
All California contractors must file a $25,000 surety bond with the Contractors State Licensing Board. This ensures you will comply with Division 3, Chapter 9 of the Business and Professions Code. In fact, a contractor license bond is required to maintain active business licensure in the Golden State. The annual premium for this bond ranges from $150 to $2,500, depending on your credit history.
Cost of CA Contractor License Bond
| Credit Rating | 1 Year | 2 Years | 3 Years |
|---|---|---|---|
| Tier 1 | $150 | $263 | $375 |
| Tier 2 | $183 | $320 | $458 |
| Tier 3 | $220 | $385 | $550 |
| Tier 4 | $500 | $875 | $1,250 |
| Tier 5 | $792 | $1,386 | $1,980 |
| Tier 6 | $1,125 | $1,969 | $2,813 |
| Tier 7 | $2,000 | $3,500 | $5,000 |
| Tier 8 | $2,500 | $4,375 | $6,250 |
| Credit Rating | 1 Year | 2 Years | 3 Years |
|---|---|---|---|
| Tier 1 | $150 | $263 | $375 |
| Tier 2 | $183 | $320 | $458 |
| Tier 3 | $220 | $385 | $550 |
| Tier 4 | $500 | $875 | $1,250 |
| Tier 5 | $792 | $1,386 | $1,980 |
| Tier 6 | $1,125 | $1,969 | $2,813 |
| Tier 7 | $2,000 | $3,500 | $5,000 |
| Tier 8 | $2,500 | $4,375 | $6,250 |
- This bond is filed with the Registrar of Contractors (NNA Surety Bonds will handle this for you).
- A signed application, including business and personal indemnity, and a credit report check are required.
- A general contractor bond does not apply to specialty contractors such as swimming pool or roofing contractors.
LLC Employee/Worker Bond
Any construction business that is organized as a limited liability company must file a $100,000 surety bond to protect employees from financial damages. This bond serves as extra protection from harmful actions by an LLC, such as failure to pay wages or interest on wages, or withholding fringe benefits.
The annual premium for this bond varies depending on the principal owner’s credit history and the financial condition of the LLC. Business and personal indemnification are required for the bond.
Cost of CA LLC Employee/Worker Bonds
| Underwriting Status | 1 Year | 2 Years | 3 Years | 5 Years |
|---|---|---|---|---|
| Preferred | $1,000 | $1,750 | $2,500 | $4,000 |
| Standard | $2,000 | $3,500 | $5,000 | $8,000 |
- A signed application, including business and personal indemnity, a credit report, and business and personal financial statements are required.
- Additional underwriting criteria may include a verification of employee counts, average monthly payroll, and annual contract volume.
LLC Employee/Worker Bond
Any construction business that is organized as a limited liability company must file a $100,000 surety bond to protect employees from financial damages. This bond serves as extra protection from harmful actions by an LLC, such as failure to pay wages or interest on wages, or withholding fringe benefits.
The annual premium for this bond varies depending on the principal owner’s credit history and the financial condition of the LLC. Business and personal indemnification are required for the bond.
| Underwriting Status | 1 Year | 2 Years | 3 Years | 5 Years |
|---|---|---|---|---|
| Preferred | $1,000 | $1,750 | $2,500 | $4,000 |
| Standard | $2,000 | $3,500 | $5,000 | $8,000 |
Bond of Qualifying Individual
A Bond of Qualifying Individual is not required for all contractors, only those who have their license qualified by another person. This individual is known as a responsible managing employee (RME) or responsible managing officer (RMO). The RME or RMO must own less than 10% of the voting stock of a corporation and not be the qualifying individual for any other license. They must also work for the company at least 32 hours per week or 80% of the business’s total operating hours.
A Bond of Qualifying Individual is in the amount of $25,000, but annual premiums vary based on the RME or RMO’s personal credit history.
Cost of CA Bond of Qualifying Individual
| Credit Rating | 1 Year | 2 Years | 3 Years |
|---|---|---|---|
| Tier 1 | $150 | $263 | $375 |
| Tier 2 | $183 | $320 | $458 |
| Tier 3 | $220 | $385 | $550 |
| Tier 4 | $500 | $875 | $1,250 |
| Tier 5 | $792 | $1,386 | $1,980 |
| Tier 6 | $1,125 | $1,969 | $2,813 |
| Tier 7 | $2,000 | $3,500 | $5,000 |
| Tier 8 | $2,500 | $4,375 | $6,250 |
Bond of Qualifying Individual
A Bond of Qualifying Individual is not required for all contractors, only those who have their license qualified by another person. This individual is known as a responsible managing employee (RME) or responsible managing officer (RMO). The RME or RMO must own less than 10% of the voting stock of a corporation and not be the qualifying individual for any other license. They must also work for the company at least 32 hours per week or 80% of the business’s total operating hours.
A Bond of Qualifying Individual is in the amount of $25,000, but annual premiums vary based on the RME or RMO’s personal credit history.
| Credit Rating | 1 Year | 2 Years | 3 Years |
|---|---|---|---|
| Tier 1 | $150 | $263 | $375 |
| Tier 2 | $183 | $320 | $458 |
| Tier 3 | $220 | $385 | $550 |
| Tier 4 | $500 | $875 | $1,250 |
| Tier 5 | $792 | $1,386 | $1,980 |
| Tier 6 | $1,125 | $1,969 | $2,813 |
| Tier 7 | $2,000 | $3,500 | $5,000 |
| Tier 8 | $2,500 | $4,375 | $6,250 |
Disciplinary Bond
A disciplinary bond is only required for contractors who have had their license suspended or revoked due to a violation of the California Contractors License Law. You must file a disciplinary bond with the Registrar of Contractors in order to get your license reinstated. The purpose of this bond is to provide extra protection for your customers. Please note that a disciplinary bond doesn’t replace the other types of bonds you must file; it is simply in addition to these bonds.
The minimum coverage amount of this bond is $15,000. The maximum coverage you may be required to obtain is ten times the amount of your contractor’s license bond. The Registrar decides the actual amount needed on a case-by-case basis, depending on the severity of your violation.
If you need more information about the requirements for CSLB bonds, or if you're ready to apply, we're here to help. Call NNA Surety Bonds at 855-431-7687 or fill out the quote request form.