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Contractor bonds explained

By Contractor Lookout · Updated November 3, 2026

Every active California contractor license must have a $25,000 contractor’s bond on file with CSLB. Depending on how the business is set up, it may also need a $25,000 bond of qualifying individual, a $100,000 employee/worker bond for an LLC, or a disciplinary bond after CSLB discipline.

A bond is issued by a surety company. The license record names the surety, so you can verify the bond yourself.

The four bonds at a glance

Bond Amount Who needs it Law
Contractor’s bond $25,000 Every active license BPC 7071.6
Bond of qualifying individual $25,000 Licenses whose qualifier isn’t the owner, a general partner or a joint licensee, with some exemptions BPC 7071.9
Employee/worker bond $100,000 LLC licenses BPC 7071.6.5
Disciplinary bond At least $25,000, up to 10 times the contractor’s bond amount Contractors ordered to post one after discipline BPC 7071.8

Contractor’s bond

This is the basic bond. The current version of BPC 7071.6 set the amount at $25,000, operative January 1, 2023 (SB 607). Without it, the license is suspended. In the current file, 6,546 licenses are suspended for a missing contractor’s bond.

Bond of qualifying individual

Every license has a qualifying individual. When the qualifier isn’t the owner, a general partner or a joint licensee, a separate $25,000 bond is required. Two exemptions apply: a corporate responsible managing officer who owns 10% or more of the voting stock, and an LLC qualifier with a 10% or more membership interest. SB 1455 amended this section, effective January 1, 2025.

Employee/worker bond for LLCs

An LLC license must carry a $100,000 bond under BPC 7071.6.5. This bond protects the LLC’s workers, covering their wages and benefits. LLCs also have a liability insurance rule: at least $1 million aggregate for five or fewer personnel, plus $100,000 for each additional person, up to $5 million (BPC 7071.19).

Disciplinary bond

After discipline, CSLB can require a contractor to post a disciplinary bond. It’s at least $25,000, can be as high as 10 times the contractor’s bond amount, and must stay on file for at least two years. A license with this bond in place shows disciplinary bond filed as a secondary status. That note means the contractor has complied, and it also tells you there was past discipline.

What a bond does and doesn’t tell you

A bond on file means a surety company has agreed to stand behind the contractor up to a fixed amount. That amount doesn’t grow with the size of your job. A $25,000 contractor’s bond is still $25,000 on a $200,000 remodel.

When a surety pays a claim on a contractor’s bond, the contractor has to reimburse it. If that doesn’t happen, the license is suspended. Under BPC 7071.11, a license is suspended at the end of 90 days without proof that a bond payout was reimbursed, and CSLB discloses the payout indefinitely.

That’s why two statuses deserve attention:

Both mean someone has already been paid from this contractor’s bond. That’s a red flag worth asking about.

A bond is also separate from workers’ comp, which is its own requirement with its own record. See how to check workers’ comp for that.

Who can make a claim on each bond, and for what, is set out in the statutes linked below. If you think you have a claim, contact the surety named on the license record or ask CSLB.

How to verify a bond

  1. Look up the license. Find the contractor in our search, then open the live record on CSLB’s Instant License Check. Our data is a weekly file, so confirm the live record.
  2. Note the bond details. Write down the surety company name and bond number shown on the record.
  3. Find the surety. Use CSLB’s Surety Bond Company Search to get the company’s contact details.
  4. Call the surety. Confirm the bond number is active for this contractor.
  5. Check for a qualifier or LLC bond. If the business is an LLC, or the qualifier isn’t the owner, look for those bonds too.

If the license shows contractor bond suspended, CSLB’s license page says to “Ask the contractor for proof of a contractor’s bond and contact the bonding company to verify bond status.” CSLB also notes a new bond may have been received but not processed. Once processed, the suspension is lifted back to the bond’s effective date. Don’t sign until the bond is on file.

The blanket bond

One more bond shows up on some licenses. A contractor with a qualifying blanket performance and payment bond on file can lawfully take a larger down payment than the usual $1,000 or 10% limit. Our down payment guide explains it.

For the rest of the checks before you hire, see how to check a contractor license and the status hub.

This is general information, not legal advice.

Sources

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