The bond is a promise to the State of California, not a policy that protects you. A surety company agrees to pay people damaged by your license law violations or unpaid wages, up to $25,000, and that amount is shared across every job you do while the bond is in force rather than reset per job. CSLB won’t issue an active license without it, and if the surety cancels it without a replacement or reinstatement reaching CSLB within 30 days, or a judgment or claim payment eats into it, the license is suspended. Some licenses also need a qualifier bond, and LLCs need a separate $100,000 worker bond. None of these take the place of liability insurance.
What the bond is and when it’s required
Under Business and Professions Code section 7071.6, a contractor’s bond has to be in place before CSLB can issue an active license, reactivate an inactive license, or renew an active one. The amount is $25,000. It rose from $15,000 on January 1, 2023, under Senate Bill 607, which also raised the bond of qualifying individual from $12,500 to $25,000.
The bond must be written by a surety company licensed through the California Department of Insurance, and the business name and license number on it must match CSLB’s records exactly. Only one bond can be in effect at a time; filing a second one for the same period cancels the first. Bonds can’t be transferred from one license to another. More on the options in contractor license bonds.
Who it protects
CSLB lists these people as able to make a claim against the bond:
- Homeowners who contracted for home improvements or construction of a single-family home and were damaged by the contractor’s violation of the license law.
- Anyone damaged by a willful and deliberate violation of the license law, or by fraud, in the execution or performance of a construction contract.
- Employees damaged by the contractor’s failure to pay wages.
- Any person or entity damaged by the contractor’s failure to pay fringe benefits for eligible employees.
Claims go to the surety company, not to CSLB. The $25,000 is not per job: it is the total available for every job during the life of the bond, and once it’s depleted, the contractor has to buy a new bond for the license to stay in effect.
Qualifier, LLC and disciplinary bonds
- Bond of qualifying individual ($25,000). Required under section 7071.9, in addition to the contractor’s bond, when the license is qualified by a Responsible Managing Employee (RME), or by a Responsible Managing Officer (RMO) who owns less than 10% of the corporation’s voting stock. An RMO with 10% or more files an exemption certification instead.
- LLC employee/worker bond ($100,000). Under section 7071.6.5, an LLC needs a $100,000 bond on top of the $25,000 contractor’s bond, for both active and inactive licenses, for employees or workers damaged by the LLC’s failure to pay wages, interest on wages, fringe benefits or other contributions.
- Disciplinary bond. After a revocation, and in some instances a suspension, CSLB requires a disciplinary bond to reinstate, reissue or reapply for a license, of at least $25,000 and no more than ten times the contractor’s bond, set by the Registrar and kept on file for at least two years.
A cashier’s check instead of a bond
CSLB accepts a cashier’s check or bank-certified check in the required amount in place of a contractor’s bond, qualifier bond, LLC bond or disciplinary bond. It does not accept certificates of deposit, savings passbooks or credit union certificates. The deposit isn’t released until three years after the license period it covers expires, or three years after the license is inactivated, expires, or is cancelled or revoked, whichever comes first, and not while a consumer complaint against it is still being decided. Someone with a claim against a cashier’s check has to file a civil action; CSLB releases the money only under a court order.
Cancellations, payouts and suspension
A bond stays in effect until CSLB receives a cancellation notice from the surety. The cancellation takes effect 30 days after CSLB gets that notice, and if a reinstatement notice or replacement bond hasn’t arrived by then, the license is suspended. A license is also suspended under section 7071.11 when a judgment or payment of a claim reduces a required bond. CSLB notes that filing a new bond lifts a bond suspension but not a judgment or claim-payment suspension.
To lift a bond suspension, a surety’s rescission of the cancellation has to reach CSLB within 90 days of the cancellation date, and a new bond within 90 days of its effective date. Work performed while the license is suspended is considered unlicensed. CSLB suggests arranging a new bond four weeks before the old one expires.
A bond isn’t liability insurance
The license bond is a promise to the State that people damaged by license law violations or unpaid wages can recover, up to a fixed amount shared by all of them. It is not a liability policy built to defend you or pay for injuries and property damage on your jobs. Where California does require liability insurance, it is a separate requirement: an LLC licensee, for example, must carry liability insurance with a cumulative limit of at least $1 million under section 7071.19, plus $100,000 for each additional person of record beyond five, up to $5 million. When I quote a contractor, the bond and the liability policy are two separate pieces. How a surety bond differs from insurance and the policies contractors usually carry.
Common questions
How much is the California contractor license bond?
$25,000, since January 1, 2023. Before that it was $15,000.
Does the bond protect me if a customer sues me?
No. It pays people damaged by license law violations or unpaid wages, up to $25,000 in total. Claims for injuries or property damage on your jobs are what a liability policy is for, subject to its own terms.
Is the $25,000 per job?
No. It is the total available for all of your jobs during the life of the bond. Once it’s depleted, you need a new bond for the license to stay in effect.
What happens if my surety cancels my bond?
The cancellation takes effect 30 days after CSLB receives the notice. Without a rescission or a replacement bond by then, your license is suspended, and work done while it’s suspended is unlicensed.
Can I post cash instead of buying a bond?
Yes, with a cashier’s check or bank-certified check for the full amount. CSLB doesn’t accept CDs or passbooks, and it holds the deposit until three years after the license period it covers expires, or three years after the license is inactivated, cancelled or revoked if that comes first.
Sources
- CSLB: Bond Requirements
- CSLB: Fast Facts, A Guide to Contractor License Bonds (Rev. 12/22)
- CSLB Industry Bulletin #22-10 (Sept. 30, 2022): contractor’s bond increase to $25,000
- CSLB: Licenses for Limited Liability Companies
- CSLB: Bond Alternatives
- CSLB: Bond Suspensions
- CSLB: General Bond Information
- CSLB: Bond Basics
General information about California contractor license bonds as of October 2026, not legal advice; the Business and Professions Code and CSLB’s current procedures control. Coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued.