Every month, hundreds of California contractors will have their license suspended by the Contractors State License Board as a result of not having an active contractors license bond (or bond alternative) on file as required by the CSLB, making it illegal for a contractor to operate until the situation is remedied. While this situation can be frustrating for a contractor caught off guard by the circumstances they find themselves in, getting the issue corrected is often relatively straight forward if we know the source of the problem. What causes a contractors bond suspension to occur? Let’s take a look.
Whats Causes a Contractors Bond Suspension?
A contractors bond suspension can occur for many reasons, but is commonly a result of the CSLB not receiving a new bond to replace a contractors expiring bond or as a result of a contractor failing to make an installment payment on an existing bond, causing the surety to issue the CSLB a cancellation notice. Bond suspensions can also occur for other reasons, however, such as a surety canceling or non-renewing an existing bond for underwriting reasons in addition to a contractor failing to obtain a new bond in the allotted time. While some contractors that no longer plan to operate will intentionally let their bond expire, many others will have this occur unknowingly. It’s the unsuspecting contractors whom may benefit most from the strategies listed below.
Preventing a Contractors Bond Suspension
To help prevent a bond suspension from occurring, contractors should verify several pieces of license information for accuracy. First, make sure their address and phone number are up to date on their CSLB online profile as well as with their bond broker and surety. Up to date contact information is the only way a contractor can be adequately notified of their renewal in advance of a bond expiration. Another tip is to make sure the bond renewal is taken care of before taking any extended vacations during the period when a current bond expires. Each month we often have one or two clients who have a bond lapse as a result of taking an extended vacation, often outside the country where they are unreachable by any method of contact.
Preventing a contractors bond suspension from occurring essentially involves making sure your bond has been issued by your surety without instance and having it posted by the expiration of your current bond. Many surety’s that commonly write California contractor license bonds will post the contractors bond with the CSLB on behalf of the contractor including Suretec, Wesco and HCC Surety to name a few. Contractors should check with their broker to see if their bond company automatically files with the CSLB if not using one of the surety’s listed above.
Also of importance is the timing of the bond filing. In general, the CSLB does not post bonds in advance of their effective date, so if a contractors new bond is not showing up on the CSLB website the same day as the expiration of the old bond, there could be an issue, or it could be a result of a delay in posting times which is generally not a big deal as long as the CSLB has the bond in their possession prior to the current bonds expiration. Often times the CSLB will be a few days behind in updating new bonds depending on the time of year and work loads, but they do provide an online posting schedule to let contractors know what time period they are currently working on here.
How Long Does Reversing A Bond Suspension Take?
Presuming a new bond is filed with the CSLB and no other issues are outstanding pertaining to a contractors license status such as renewal fee’s, proof of workers compensation etc, a license suspension can be lifted in relatively short order. If the issue is pressing, contractors can contact the CSLB staff who may be helpful in expediting the process.
By Jeremy Schaedler