J&C Corbett Insurance Services, Inc.

Contractor's License Bonds

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• Contractor's License Bond - Online Application
• Contractor's License Bond - Downloadable Application
• Roofing Contractor's Bond
• Swimming Pool Contractor's Bond

FAQ

What is a Contractor's License Bond?
The Contractors' State License Board (CSLB) requires every actively licensed contractor to file a Contractor's License Bond or a bond alternative (e.g., cash deposit) in the amount of $12,500 with the Registrar of Contractors. A Contractor's License Bond is a type of surety bond because it is a contract where a surety (e.g., bonding company) promises the State of California that the contractor will comply with the Contractors' License Law. The surety specifically agrees to pay claims made by homeowners, employees, and other eligible persons who suffer losses because of the contractor's violation of the Contractors' License Law (e.g., abandons a construction project). It is very important to understand that the contractor is required to reimburse the surety for any expenses it incurs as a result of the contractor's violation.

What is a Bond of Qualifying Individual?
This is also known as an "RME" or "RMO" bond because it covers the responsible managing employee or responsible managing officer of a licensed sole proprietorship, partnership, or corporation. The RME or RMO bond is similar to a Contractor's License Bond in that the surety promises the State of California that the RME or RMO will comply with the Contractors' License Law and agrees to pay claims made by homeowners, employees, and other eligible persons as a result of the RME's or RMO's violations. Effective 01/01/07, the CSLB requires a bond in the amount of $12,500 for a Qualifying Individual (RME/RMO). Note that an RMO bond is not required for an RMO who owns 10% or more of the corporation's voting stock. Remember that the surety is entitled to reimbursement for any expenses it incurs on account of violations by an RME or RMO.

Is it true that the amounts of the Contractor's License Bond and Bond of Qualifying Individual are scheduled to increase?
The bond amounts may increase again, but the CSLB has not announced an increase or given a date for the new bond amounts. We will notify all of our clients as soon as an announcement is made.

How do I apply for a Contractor's License Bond?

1. You may complete our online application. We use a simple one-page application that you can complete in less than five minutes.
2. We will mail or fax you the application.
3. You can download the application from our website and submit it by mail or fax.

Payment may be by check or credit card: Visa, MasterCard, American Express, and Discover/Novus.

Can I renew my existing Contractor's License Bond by telephone?
Yes, just give us your credit card information when you call and we will renew your bond by phone, or you can make a payment online from our home page. We will mail you a copy of the bond renewal (continuation) letter that we sent to the Registrar of Contractors, a wallet-size card with your bond number, expiration date, and other info, and a copy of your credit card receipt.

What happens if I do not renew my Contractor's License Bond by the expiration date?
Your contractor's license is automatically suspended when your bond is cancelled because it was not renewed before the expiration date. We can get your contractor's license reinstated if you act within 90 days from the date of notice of bond cancellation. Call us as soon as you receive a notice of bond cancellation, so that we have enough time to do the paperwork and send the Registrar of Contractors a reinstatement (rescission of cancellation notice) letter within the 90-day period.

I am changing my business from a sole ownership to a corporation. Will my Contractor's License Bond transfer?
No. Whenever there is a change in business entity a new bond is required to transfer the license. If you have a bond for your current entity, you may be able to receive a partial refund after the license is transferred to the new entity. Please request cancellation in writing.

Why do bonding companies check my personal credit history?
The contractor is responsible for reimbursing the bonding company for any losses it incurs as a result the contractor's violation of the Contractors' License Law; therefore, your personal credit history is of interest to the underwriter. This is usually not a problem for our clients because our primary bonding company accepts 90-95% of the Contractor's License Bond applications submitted. We can still get you a Contractor's License Bond if you have credit problems, but the premium will be higher. Our recommendation to anyone with credit problems is to buy a one-year bond at the higher premium and get a copy of your credit report. If you can resolve your credit problems during that year, we may be able to write your next bond with a bonding company that offers preferred (lower) premiums.