EmploymentQuestion 1003 of 1605
What happens to a contractor's license if the required workers' compensation coverage lapses and no exemption is on file?
a.The contractor receives a warning but keeps working for 90 days
b.The CSLB converts the license to inactive status permanently
c.The license is automatically suspended by operation of law
d.Nothing, as long as the contractor renews on time
Explanation
Under Bus. & Prof. Code §7125.2, failure to maintain required workers' compensation coverage results in automatic suspension of the license by operation of law. The suspension is effective on the date coverage lapsed, and the contractor may not lawfully operate until coverage and proof are restored.
Law Reference: Bus. & Prof. Code §7125.2Practice all 1605 questions free — no signup required.
Related questions on this topic
- An employee of an illegally uninsured contractor is injured on the job. What special legal right does the injured worker gain because the employer had no coverage?
- When the Division of Labor Standards Enforcement discovers an employer operating without required workers' compensation coverage, one immediate enforcement action it can take is to:
- As of January 1, 2026, under the phase-in enacted by SB 216, which licensed contractors must carry workers' compensation insurance?
- A licensed general contractor hires an unlicensed subcontractor who brings his own crew but carries no workers' compensation insurance. If one of that crew is injured, who is most likely liable to provide workers' compensation benefits?
- The single most effective way for a general contractor to avoid becoming liable for a subcontractor's injured workers is to:
- After an employee reports a work-related injury, how quickly must the employer generally provide the employee with a workers' compensation claim form (DWC-1)?
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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)