Business & LicensingQuestion 1444 of 1605
What happens to a license if a contractor with employees fails to maintain workers' compensation coverage?
a.The license is automatically suspended by operation of law
b.Nothing until renewal
c.The bond doubles
d.The contractor gets a warning letter only
Explanation
Under B&P Code section 7125.2, the failure of a licensee to obtain or maintain required workers' compensation insurance results in automatic suspension of the license by operation of law, effective the date coverage lapses.
Law Reference: B&P Code §7125.2Practice 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)