Congratulations on your journey to becoming a licensed contractor in California! If you’re reading this, there’s a good chance you’ve reached the point in the licensing process where you’ve been assigned your application fee number by the Contractors State License Board and have received a letter indicating you need to show proof of bonding. What’s the next step in obtaining a bond and filing it with the CSLB? It’s actually quite simple as you’ll see below.
The Bonding Process For New Applicants
The CSLB requires California contractors to post a $15,000 license bond, or cash equivalent, for the benefit of their customers or employee’s that can potentially incur financial harm as a result of a contractor’s actions. To become bonded, an applicant would first obtain a bond quote by contacting a surety bond broker, such as our agency, or completing an online quote offered by some brokers on their website. New applicants can obtain a bond quote instantly online from our agency using the “Get Quote” tool in the top right of this page. If your letter indicates you must also provide a bond of qualifying individual (BQI) in addition to your license bond, you can also quote that bond online as well.
How Does A New California Contractor Become Bonded?
For many aspiring contractors still navigating the licensing process, becoming bonded to satisfy CSLB guidelines can seem like a confusing process as its likely the first surety bond they’ve ever had to purchase. Fortunately, we’ve greatly simplified the license bonding process to where contractors can quote, purchase and file their contractors license bond online with the CSLB in under 5 minutes. Sound simple? It is. Here’s how the process works in three easy steps:
Step 1 – Have Your Contractors License or Application Number Handy
To get started, just enter your contractors license or application number on the right side of this page in the “Instant Bond Quote” box and click the “Get Quote Now” button.
Step 2 – Complete Your Quote
With just a few pieces of information, most contractors will receive an instant approval on a highly competitive bond rate with a term option of 1-3 years. Multi-year bonds offer a great opportunity for increased savings as well as protection against rising bond costs in the future.
Step 3 – Purchase Your Bond
After agreeing to the bond terms and entering payment information, contractors can confirm their purchase online and print their bond ID card. Following the purchase confirmation, we’ll simultaneously send contractors an email that contains pdf attachments including a copy of the license bond and other relevant documents. It’s important to note that contractors are not required to file a copy of their bond with the CSLB as we electronically file all bonds on behalf of California contractors automatically. Contractors that elect to file their own bond may actually delay their application process as the CSLB requires an official signed copy of the bond that is provided directly by the surety. Soon after, we’ll also mail contractors a plastic wallet ID card. In just three simple steps the bonding process is complete and no further action is required by the contractor with regards to their bond until it’s up for renewal. Pool or roofing contractors should contact our office as instant online quoting is not available for these classifications.
How Much Do Contractor License Bonds Cost?
For most surety’s, contractor license bond rates are generally credit based along with other rating factors. Contractors license bonds function in a similar manner as a loan in that should a valid claim occur, the contractor is responsible for repaying the surety the amount of the claim, plus expenses. This mechanism is called indemnity and is one way surety bonds differ from typical insurance that a new contractor may be more familiar with. With this in mind, bond rates often range from around $100 per year for those with good credit, to well over $1000 per year for those with very poor credit depending on the surety and its underwriting guidelines.
Fortunately for some new contractors, we currently offer a bonding program through HCC Surety that does not take credit into account for the first year, if an applicant meets certain criteria such as not having a C-53 pool or a C-39 roofers classification and also having not had, or been affiliated with another contractors license in the past. This program has saved contractors over $1000 in some instances. For contractors that know they have poor credit, please contact our agency directly for an HCC quote, as these quotes are not available directly from our website. If you think your credit is good (660-680 FICO or better), we think you will be very happy with our online bond quotes, which can be purchased online in just a few minutes.
What Happens After I Purchase My Bond?
After you purchase your license bond, your surety will electronically file it with the CSLB on your behalf. The CSLB does not accept bonds in advance of their effective date, so if you wanted your bond effective date to be today, the surety would file your bond same day. By contrast, if you choose an effective date 5 days in the future, your bond will be filed in 5 days. With this in mind, contractors looking to have their bonding requirement satisfied as quickly as possible may want to choose an effective date closer to the present day.
As noted, our agency will ensure your license bond is filed on your behalf with the CSLB, which is important because the CSLB will ask you to show proof of bonding when submitting your application. It’s important not to send the CSLB a copy of the bond we provide you following your purchase as this bond is for your records and will slow the bonding process because the CSLB will only accept the original signed copy which is sent electronically on your behalf. At an applicants request, we can provide them with a signed, original bond at no additional cost.
As part of your bond package, our agency will email you a copy of your bond for your records and we will also send a copy by mail. At this point the bonding process is complete until your bond is up for renewal. Most new applicants can expect the entire bonding process including obtaining quote, purchasing their bond and having it filed with the CSLB to take no more than 5 minutes or so with our agency in most instances. It’s that simple. Have questions? Give us a call!
By Jeremy Schaedler