Insurance & LiensQuestion 1530 of 1605
Separate from project insurance, the CSLB requires every active licensed contractor to maintain a 'contractor's bond' (contractor license bond). Its main purpose is to:
a.Guarantee the contractor's profit
b.Pay the contractor's employees' wages during slow seasons
c.Insure the contractor's tools
d.Provide limited protection to consumers and others harmed by the contractor's violations of the licensing law
Explanation
The contractor's license bond required under Business & Professions Code §7071.6 (currently $25,000) protects consumers, employees, and others from certain damages caused by the contractor's violation of the Contractors State License Law. It is a suretyship, not insurance for the contractor.
Law Reference: Bus. & Prof. Code §7071.6Practice all 1605 questions free — no signup required.
Related questions on this topic
- 'Subrogation' in insurance refers to:
- A 'waiver of subrogation' clause between an owner and contractor generally means:
- A contractor who records a mechanics lien for an amount it knows is willfully overstated risks:
- Which of the following is TRUE about the difference between the CSLB contractor's license bond and a project performance bond?
- A preliminary notice in California must be served by which method to be effective?
- A subcontractor's certificate of insurance names the general contractor as 'certificate holder.' Being a certificate holder means the general contractor:
Last reviewed: · editorial process
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)