Under California state law, all contractors to purchase a license bond. Maintaining a minimum of a $15,000 bond is required to be a licensed contractor in California, these bonds are held by the CSLB(Contractors State License Board).

This is one of the primary conditions you need to meet to keep an active license. They hold these bonds to protect from people being financially harmed because of a contractor’s work. While California’s state retains the right to increase the amount of the bond needed periodically, it stands at $15,000.

It’s essential to recognize the difference between a contractor’s bond and insurance. The State of California completely indemnifies all licensed bonds that they hold for contractors. This means on receipt of a successful claim payment will be made from the bond, instead of having to wait on payment from a contractor. This does not relieve the contractor of the responsibility for paying the debt. It still holds them accountable for the surety repayments, and they outlined this in the terms and conditions of the bond indemnity agreement.