


A contractor’s license bond can be valid for as little as one year or as many as five years depending on the surety. California contractors with good credit usually have an opportunity to purchase a license bond with a term of several years, while those with poor or marginal credit generally are not offered bond terms greater than one year. It’s important to note that whether a bond has a term of one year or several years, all contractors must re-qualify for a new bond when their current bond expires. When this occurs, contractors often experience large premium fluctuations both up and down as compared to their prior bond due to changes in their credit profile or other rating factors. This raises the question as to when it’s most advantageous for a contractor to purchase a bond for a single year, or opt for a multi-year option if available. Below is a short summary of the pros and cons of each option.
When to Purchase a License Bond for Multiple Years?
Pros
[…]