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:
Explanation
The $25,000 bond required by B&P §7071.6 is a suretyship for the benefit of the people listed in §7071.5 — homeowners and property owners damaged by a violation, anyone damaged by a willful violation or fraud, and employees owed wages or fringe benefits. (a) reverses the direction of the protection, and in fact the surety may seek indemnity from the contractor after paying. (b) describes a performance bond, which is project-specific and sized to the contract. (c) describes commercial general liability insurance, which the license bond does not replace.
Law Reference: B&P Code §7071.5 / §7071.6This 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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Related questions on this topic
- 'Subrogation' in insurance refers to:
- A waiver of subrogation clause between an owner and a contractor generally means:
- A contractor who records a mechanics lien for an amount it knows is willfully overstated risks:
- Which statement about the CSLB license bond and a project performance bond is TRUE?
- A preliminary notice must be given 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:
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