What happens to a license if a contractor with employees fails to maintain workers' compensation coverage?
Explanation
Under B&P §7125.2 the license is suspended by operation of law on the date coverage lapses, and §7125.4 makes the suspension retroactive to that date, so work performed in the gap is unlicensed work with §7031 consequences. (b) imports due-process machinery that applies to disciplinary revocations, not to this automatic suspension. (c) is the misconception that renewal is the checkpoint; the certificate is verified continuously, not annually. (d) confuses suspension with revocation — the license is restored when acceptable coverage is filed.
Law Reference: B&P Code §7125.2 / §7125.4This 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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