How to Purchase a California Contractor License Bond

If you are a savvy and career-minded entrepreneur, becoming licensed is a smart move.

This is because having a California contractor license bond will allow you to perform a variety of contracted services, both residential and commercial, safely, and within the parameters of state compliance.

Obtaining a CCLB is a pretty straightforward process, and in this article, we shall be looking at a step-by-step guide on how to purchase a California Contractor License Bond.

But before then, let’s look at who needs a contractor bond in CA.

How to Purchase a California Contractor License Bond

Who Needs a Contractor’s License in California?

If you are in CA, it’s mandatory to get a contractor’s license bond if you are going to construct, alter, or do both in any of the following fields:

  • Highways
  • Building (Plumbing, masonry, carpentry, flooring, etc.)
  • Excavation
  • Road
  • Railroad
  • Parking facilities
  • Other structures

Again, it is mandatory to have a bond, if you are contracted to work on a project valued at $500 or more (save from federal projects in CA), and this includes labor and material.

Exemptions of CA Contractor Bond

However, not everyone in the fields above is required to hold a bond. Some of the exemption include:

  • Public employees working on public projects
  • Builders working on their property
  • Employees on a wage and those not working independently as their own business

Eligibility of California Contractor License

Before you obtain a CA contractor license bond, there are several basic qualifications that you must pass. These qualifications include:

  • Must be at least 18 years
  • Have a valid SSN for taxation purposes
  • Show proof of experience in your domain/ Alternatively; you can be represented by another individual with the necessary experience

If you are not a CA resident, you can still get a license, provided you meet the above qualifications. Again, some of the states have reciprocity agreements with CA, which makes it even easier to get the bond.

Step By Step Guideline on How to Purchase a California Contractor License Bond

Step 1: Determine Which CA License Bond you need

Before contacting contractorbond.org for contractor licensing services, you should determine the exact surety bond, alongside the bonding amount needed.

The three common classifications of contractor license bonds are:

Having this information from the get-go will allow your bond issuer to issue with a bond quickly and accurately.

Another effective way of going about this is by contacting the project owner that requires to get a bond, and this way, you’ll get a license bond that is ideal for your client.

Apply for a Surety Bond

To apply for a bond, you will have to search online for bond issuers.

If you are in California and are going to work on a project within the same state, you can look for license providers within the state.

Ideally, however, we recommend that you pick those providers that issue bonds nationwide. This way, you are assured that the provider will bond you whatever state you plan to work in.

After contacting a provider, understand that you will need to answer a few questions, and in some instances, you might be required to take on an examination.

Typically, fields that are covered during the screening process include your professional work experience and personal financial history.

Again, depending on the type of bond you need, you might also be asked to provide our SSN so that the provider can review your credit score.  And if your business is a partnership, all the financial credential of the other partners might be considered as well.

Get a Surety Bond Quote

The exact price of a bond varies depending on several reasons.

For starters, you will need to consider the bond amount. For obvious reasons, as $10,000 bond costs more than $5,000 bond.

Besides the bond amount, your surety will then calculate the premium depending on other credentials such as financial credibility.

For instance, if you have a good credit rating, you can expect to pay anything from 1-5 percent of the bond amount, while those with bad credit score can pay up to 20%. Nevertheless, this is the general assumption as nothing is cast on a stone-the final pay will depend on your negotiation skills with the surety.

Pay for your Bond

After you approve the quote, you will be required to start paying premiums. Though some underwriters can provide premium financing, you should always be prepared to pay premiums in full.

Verify your Bond

It’s essential that while filling your bond, all information be 100% accurate.

In any case, a bond application can be rejected if it has:

  • Typos
  • Spelling errors
  • Wrong business name
  • Wrong bond amount
  • Wrong signature

In case you find an error, you should contact your bond surety immediately.

File your Surety with the Obligee

The final step of purchasing a California contractor license bond is filling it with the obligee, which requires the bond. However, it should happen once you have verified the accuracy of the bond form.

Amila Gamage

Author: Amila Gamage

Amila Gamage is a Contracts Engineer with more than 16 years experience in construction sector. She writes this blog to share her experience and knowledge in the field of Contract Administration. View all posts by Amila Gamage

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