What is the $25,000 California contractor bond?
The contractor bond is a $25,000 surety bond that nearly every active CSLB licensee must keep on file, required by Business & Professions Code §7071.6. It's a limited fund that a homeowner, another damaged party, or an unpaid worker can claim against when the contractor violates the contracting license law. It is not insurance, and it is not a warranty fund for disappointing work.
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Summary — key takeaways
- The contractor bond is $25,000, required by B&P Code §7071.6 (raised from $15,000 on January 1, 2023).
- A $25,000 cashier's check deposit with CSLB is an accepted alternative to a surety bond.
- It pays claims for licensing-law violations; it is not insurance or a warranty fund.
- Claims are filed with the surety company; most of the fund is reserved for homeowner claims.
- A lapsed bond suspends the license until it's restored.
What the $25,000 bond covers
Required by Business & Professions Code §7071.6, the bond protects people harmed by violations of the contracting license law: a homeowner whose own residence was damaged by a violation, anyone harmed by a willful or fraudulent violation, and workers owed wages or fringe benefits. The amount is $25,000, raised from $15,000 effective January 1, 2023, and the bond (or an allowed $25,000 cashier's check deposit with CSLB) is filed with CSLB and reflected on the license record. Claims go to the surety company that issued the bond, and most of the bond amount is reserved for homeowners who hired the contractor to improve the home they live in.
A bond is a guarantee, not insurance
A bond is not insurance and not a deposit the contractor can spend. A valid claim needs a violation of the license law, not just a result you're unhappy with, so it isn't a workmanship warranty, and caps on recovery mean it rarely makes anyone whole on a large job. It's a guarantee: if the surety pays a claim, the contractor must repay the surety and keep the bond in force, or the license is suspended. That's why a lapsed bond is a common reason an otherwise active license shows as suspended.
Other bonds some licenses carry
Some licenses carry additional bonds. A qualifying individual's bond of $25,000 is required when the license is qualified by a responsible managing employee, or by an officer or member who owns less than 10 percent of the company. LLC licensees must also file a $100,000 bond for the benefit of employees and workers, on top of their required liability insurance. CSLB can even require a doubled $50,000 contractor bond from applicants with prior unlicensed-contracting violations. The standard $25,000 contractor bond is still the one almost every licensee maintains, and each profile here shows whether one is on file.
Frequently asked questions
How much is the California contractor bond?
$25,000, set by Business & Professions Code §7071.6, raised from $15,000 effective January 1, 2023. A contractor can post a $25,000 cashier's check or cash deposit with CSLB instead of a surety bond; either way it must stay on file for the license to remain active.
Does the contractor bond protect homeowners?
In limited ways. A homeowner can file a claim with the surety for violations of the contracting license law connected to work on their own home, and most of the bond amount is reserved for exactly those homeowner claims. It is not a warranty fund: for property damage or injury you rely on the contractor's insurance, and for workmanship disputes on CSLB's complaint process.
Can a contractor post cash instead of a bond?
Yes. A $25,000 cashier's check or cash deposit with CSLB is an accepted alternative to a surety bond. The practical difference for consumers: recovering against a deposit generally requires suing and getting a court order, rather than filing a claim with a surety company.
What happens if a contractor's bond lapses?
Their license is suspended until the bond is restored. A contractor cannot legally work on a suspended license, so a missing bond is worth checking before you hire.
Is $25,000 enough to cover a bad remodel?
Often not, and it is important to plan around that. The $25,000 is the total bond for the whole license, not a per-customer amount, and it can be drawn down by earlier claims from other consumers, with a share reserved for homeowner claims. On a large project, treat the bond as a backstop rather than your protection: check the license status and complaint history first, insist on liability insurance and workers' compensation, and keep payments tied to completed milestones.
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