A contractor's workers' compensation policy is canceled and the contractor has not filed an exemption certificate. What is the consequence for the CSLB license?
a.Nothing changes as long as no claims are filed
b.The license converts to an inactive engineering license
c.The contractor receives an automatic 90-day grace period with full rights
d.The license is automatically suspended
Explanation
Under Bus. & Prof. Code §7125, a contractor with employees must keep a valid workers' compensation certificate on file with the CSLB. If coverage lapses and no exemption is on file, the license is automatically suspended.
Law Reference: Bus. & Prof. Code §7125.2This topic, taught in full in the CSLB Law & Business guide. CSLB Law & Business — Complete Study Guide (2026) — PDF + EPUB, $24.99 · 14-day refund →
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PrepPass team · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)