Business & LicensingQuestion 1444 of 1632

What happens to a license if a contractor with employees fails to maintain workers' compensation coverage?

a.The license is suspended at once by operation of law
b.The license is suspended only after a Registrar hearing
c.The license stays active until the next renewal date
d.The license is revoked and cannot be reinstated

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 / §7125.4

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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)
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