The California contractor license bond: what it is and who needs it

What the contractor license bond is

To hold a California contractor license, a contractor must post a $25,000 surety bond or cashier's check with the Contractors State License Board (CSLB). The amount increased to $25,000 on January 1, 2023, under Senate Bill 607.

Most contractors buy the bond from a surety company. Under certain circumstances the surety guarantees payment for damages if the contractor violates state license law. CSLB requires the surety to be licensed through the California Department of Insurance.

Who needs it

CSLB says a contractor bond must be in place before it can issue an active license, reactivate an inactive license, or renew an active license. In practice, every contractor with an active license has one on file.

• Contractor bond ($25,000): filed for the license itself.
• Bond of qualifying individual ($25,000): required when the license is qualified by a Responsible Managing Employee (RME), and in certain cases by a Responsible Managing Officer (RMO).
• Disciplinary bond: can be required to reinstate a license after discipline. CSLB sets it between $25,000 and ten times the contractor bond amount, kept for at least two years.

What it protects

According to CSLB, the bond is filed for the benefit of consumers damaged by defective construction or other license law violations, and for employees who were not paid wages due to them. CSLB's consumer fact sheet lists who may file a claim:

• Homeowners who hired a contractor for home improvement or to build a single-family home and were damaged by a license law violation.
• People harmed by a contractor's deliberate license law violation or fraud on their project.
• Employees who were not paid wages, and eligible employees owed fringe benefits.

The license bond is separate from workers' compensation and from any liability insurance a contractor may carry. CSLB tracks the bond and workers' compensation separately on the license record.

Filing rules for contractors

• The business name and license number on the bond must match CSLB's records exactly.
• CSLB's headquarters office must receive the bond within 90 days of the bond's effective date.
• A contractor may deposit a cashier's check with CSLB instead of a surety bond.
• If the surety cancels a required bond, CSLB suspends the license.

How to make a claim

CSLB does not process claims against surety companies. Its fact sheet describes these steps:

1. Find the surety. Look up the contractor on CSLB's Check A License page; the bond details are on the license record.
2. Gather your records: the contract, proof of payments, messages, and evidence of the problem.
3. Contact the surety directly, explain what happened and submit your evidence.
4. Cooperate with the surety's investigation and wait for its decision.

If you are not satisfied with the surety's response, CSLB notes you may take the contractor to small claims court for amounts up to $10,000; larger claims go to superior court. If the contractor posted a cashier's check instead of a bond, you must file a lawsuit against the licensee and the CSLB Registrar, and CSLB can pay from the deposit only under a court order.

A revoked license does not end the right to claim. If the problem happened before the revocation, CSLB says you have up to two years from the license's original expiration date to act (Business and Professions Code section 7071.11).

This guide is general information, not legal advice. Rules change; confirm current requirements with the agency that issues the license or permit. Last reviewed Sep 29, 2026.