Licensed vs. bonded vs. insured — what's the difference?
Licensed means CSLB has verified the contractor's qualifications and they're authorized to work. Bonded means a contractor bond — a limited $25,000 financial guarantee tied to the licensing law — is on file. Insured means the contractor carries insurance (workers' compensation for their crew and, separately, general liability for damage). They are three different protections, and a good contractor has all three.
Verified against CSLB on · reflects current CSLB rules and California law.
Summary — key takeaways
- Licensed: CSLB verified qualifications and authorized the contractor to work.
- Bonded: a limited $25,000 guarantee tied to the licensing law (B&P §7071.6).
- Insured: workers' compensation for the crew and general liability for damage.
- A bond is not insurance and won't cover most property damage.
- A good contractor is all three — verify each before hiring.
Licensed — verified and authorized
Licensed is the foundation: to hold a CSLB license, a contractor passed trade and law exams, met experience requirements, and maintains a bond. You verify it by status (Active) and classification.
Bonded — a limited financial guarantee
Bonded refers to the contractor bond required under Business & Professions Code §7071.6 — currently $25,000. It's a limited guarantee a consumer, employee, or the state can claim against for specific licensing-law violations. It is not broad insurance and won't cover most property damage.
Insured — workers' comp and liability
Insured covers two separate things: workers' compensation, which protects workers (and you) if someone is injured on the job, and general liability insurance, which covers property damage and injuries the contractor causes. CSLB tracks workers' comp but not general liability — ask for a current certificate for the latter.
Frequently asked questions
Is a bonded contractor the same as an insured contractor?
No. A bond is a limited financial guarantee tied to the licensing law (currently $25,000). Insurance — workers' compensation and general liability — provides much broader protection against injury and property damage. A contractor should be both bonded and insured.
Does being licensed mean a contractor is insured?
Not necessarily. A license requires a bond and, for many classifications, workers' compensation — but general liability insurance is separate and not part of the CSLB license. Confirm liability coverage directly with the contractor.
Which matters most: licensed, bonded, or insured?
All three. Licensed confirms authorization and qualifications, the bond gives a limited claim fund, and insurance protects you against injury and damage. Start with an Active license, then confirm the bond and insurance.
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