Business FinancesQuestion 665 of 1605
When is a Bond of Qualifying Individual (BQI) required, separate from the standard $25,000 Contractor License Bond?
a.When the licensee employs more than 10 workers
b.When the licensee operates in more than one CSLB classification
c.When the licensee elects to self-insure workers' compensation
d.When the qualifying individual is an RMO or RME who is NOT a bona fide owner of 10% or more of the licensed entity — to provide additional security in case of the qualifier's failure to supervise
Explanation
Bus. & Prof. Code §7071.9 requires a separate $25,000 Bond of Qualifying Individual whenever the RMO or RME is not a bona fide owner of at least 10% of the licensed entity. The rationale: when a non-owner qualifier 'rents' their experience to the business, the BQI provides extra recourse for the public if supervision fails. The 10-employee, self-insurance, and multi-classification options are unrelated to §7071.9. A bona fide owner-qualifier (10%+) is exempt from the BQI requirement because their ownership stake is presumed to align supervision incentives.
Law Reference: Bus. & Prof. Code §7071.9Practice all 1605 questions free — no signup required.
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Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)