Effective January 1, 2023, contractor license bonds, qualifying individual bonds, and disciplinary bonds for all licensed contractors in the State of California will increase to $25,000.
This announcement was first publicized in 2021 as a result of Senate Bill 607. The contractor license bond will increase from $15,000 to $25,000, and qualifying individual bonds will change from $12,500 to $25,000.
Read on to learn more about the new requirements and what you must do to remain compliant as a contractor in California.
Do I need to contact my surety company to update my bond limit?
More than likely, your current surety company will automatically adjust your bond limit for you and notify you of the change (like we do at ZipBonds). If you don’t hear anything, contact your surety to ensure the update takes effect in the new year.
Who needs a California contractor’s bond?
Before the California Contractors State License Board (CSLB) will issue you a contractor’s license, you must have an active contractor’s bond in place. You must also have this bond to reactivate, inactivate, or renew your license.
A California contractor’s bond benefits consumers who may suffer damages if construction work is defective or a contractor violates a licensing law. The bond also protects a contractor’s employees, ensuring they receive fair wages.
California Contractors Bond Requirements
Here’s a brief rundown of a contractor’s requirements for the following surety bonds. Visit the CSLB website to learn more.
Contractor’s Bond
You must obtain this bond to receive your contractor’s license in California.
- Must be written by a surety company licensed through the California Department of Insurance
- $25,000 bond limit
- An attorney-in-fact must sign the bond
- The license number and business name on the bond must correspond with the CSLB’s records
- Bond must be written on an official form
- CSLB’s Headquarters Office must receive the bond within 90 days of the bond’s effective date
Bond of Qualifying Individual
You may need this bond in addition to the contractor’s bond if your license is qualified by a Responsible Managing Employee or Responsible Managing Officer who doesn’t own at least 10% of the corporation’s voting stock.
- Must be written by a surety company licensed through the California Department of Insurance
- $25,000 bond limit
- An attorney-in-fact must sign the bond
- The license number, business name, and qualifier’s name on the bond must correspond with CSLB records
- Bond must be written on an official form
- CSLB’s Headquarters Office must receive the bond within 90 days of the bond’s effective date
Disciplinary Bond
If your contractor’s license has been revoked for violating the Contractors’ License Law, you must file a disciplinary bond with the Registrar to get your license.
- Bond is in addition to other contractor bonds
- $25,000 bond limit
- The bond must remain in effect and on file with the Registrar for at least two years
- License must remain current and active while the disciplinary bond is on file
- Must be written by a surety company licensed through the California Department of Insurance
- An attorney-in-fact must sign bond
- Bond must be written on an official form
- The license number and business name on the bond must correspond with CSLB records
- CSLB’s Headquarters Office must receive the bond within 90 days of the bond’s effective date
Frequently Asked Questions
What are the new bond limits?
The new bond limit for contractor bonds and qualifying individual bonds in California is $25,000.
When does the new bond limit take effect?
January 1, 2023. You must utilize the new bond limit if your bond goes into effect in January 2023 or later. If your bond was active before this date, you may continue using your current $15,000 bond (or $12,500 for qualifying individual bonds). Your surety provider should increase the bond limit for you automatically.
Will my contractor’s bond premium increase?
Yes, your premium for your contractor’s bond or qualifying individual bond may increase starting January 1, 2023.
Apply for Your California Contractors Bond Today
If you need any of the bonds mentioned in this article or have questions about your requirements, call us at 888-435-4191 or email support@zipbonds.com. We can help you determine which conditions apply to you and walk you through the application process.