A contractor’s license bond, or California contractor bond, is a contract where a surety company declares that the contractor which is listed on the license of the contractor bond they issued won’t violate the license contractors law within the state which they are licensed. Now, California requires all contractors to have a license bond. Therefore besides the fact that it is the law, listed here are the reasons each contractor requires a contractor bond. Because having a contractor’s bond is not optional, many contractors choose to purchase their bonds from ContractorBond.Org.
Suspension of License
The CSLB or (California Contractors State License Board) keeps tabs on contractors who have bonds and the ones that do not. If you cancel the bond, the surety company that you had the bond need to send the CSLB a cancellation notice. If a notice for the bond reinstatement isn’t received by the License Board or a replacement bond isn’t received by the board within thirty days from the time they have the cancellation notice, the license of the contractor will be suspended.
Now, in the state of California, it’s illegal for those without a license to do contracting work on any project which is valued at $500 or above in materials and labor. Without a license, you’re very unlikely to be hired, and if perhaps you are hired, and you’re caught working without having a license, you can face severe charges from the CSL Board.
A Certified Surety Company
If you’re a contractor, you already understand that construction and remodeling projects do not often work out as you planned – even when thing seem to go well. Whether because of human error, weather-related, or faulty materials, any person may file claims against a surety company for a damaged by deliberate and/or willful violation of a construction contract. Therefore, even if you are not at fault personally, or it wasn’t intentional, somebody still might file a claim against the company. IF this kind of thing occurs, the surety company that you hold the license bond will have to pay the claim.
Since a contractor bond is not really insurance, in a situation of a claim payout like an accident, you have to repay the surety company some amount paid on your behalf. Certified surety companies will then work to protect you against frivolous, fraudulent or inaccurate claims, so because of this, it is essential to get the most experienced and reliable surety company for the contractor bond. Now, the more experience of fighting claims they have, the less of a chance you’ll have to pay a claim a day and the more the company is safe.
California contractors are first required by law to reveal to property owners whether they have a license bond or not. If you do not have a bond, then property owners and other clients are likely to select another contractor.
Also, contractors are required to take a bond of $12,500 the bond is required to get a contractor’s license. When you’re applying for the license be careful almost half of the entire applications which is submitted to CSLB are usually incomplete and have to be rejected!
If you’re unsure about the size and type of bond which you need, call a surety bond expert today for more details.