How Do You Get a Contractor Bond in California

How Do You Get a Contractor Bond in California

To be a contractor in the great state of California means that there are a variety of options open to your business enterprise. However, to do business in the state you are required to get a Contractor License Bond. It can be difficult and costly obtain without help. So, let’s explore the best way to get a contractor bond without paying excess money or waiting for a prolonged period of time.

What is a contractor license bond?

A license bond is a kind of surety bond that allows a contractor to operate their business. In a way, it protects the business but also the people that purchase the business’ services. Regardless it is necessary for the licensure of the business in order to operate inside California.

Why do contractors have to get a bond?

Contractors need to meet a certain set of criteria in order to obtain their state bond. It is necessary that a contractor’s bond has to be set in place before the Contractors State License Board or CSLB can issue or reactivate a license. The CSLB says that bonds are in the interest of customers who pay for services that result in damage or destruction due to poor construction or law violation. Bonds may also benefit employees who unfairly did not receive the compensation they are owed and wish to take legal action. However, there is also the implication that the company will operate by an ethical and moral code and not take advantage of their clients as well.

What are the requirements to get a bond?

The state requires the contractor to meet certain requirements to get a bond as well. They are:

  • The business name and license number must be an exact match between the Contractor’s State License Board’s records and the bond.
  • The bond requires the signature of the company attorney to ensure everything is in order.
  • The form that the bond is requested on must be an Attorney General approved form.
  • The Contractor’s State License Board must receive the bond request within 3 months of the date the bond is to go into effect.
  • The amount of the bond must be $15,000.00 exactly.
  • The bond has to be written through a company licensed through the California Department of Insurance

Meeting these requirements doesn’t mean that it will easy to get a bond. As it turns out there is a long line of people, especially in California, waiting to get their contractor’s bond. There are companies that assist with this process and can help facilitate this process at a much faster pace. Hiring one of these companies is going to require a little more money but the general consensus is that it’s worth it. The process can be long and drawn out and it’s totally worth it to skip a headache. In fact, the only way to get a bond faster than this is to know someone on the board.

Only Work With Bonded and Insured Contractors

Only Work With Bonded and Insured Contractors

Hiring a contractor to do some work on your home or office could happen for a number of reasons ranging from faulty service installations to small repairs on walls, doors or windows. In any case, you will need a competent professional who is able to carry out the task at hand. However, it is just as important to only work with bonded and insured contractors.

What is a Bond?

A bonded contractor has a bond from a surety company that ensures that you won’t pay for any expenses incurred due to the contractor’s inability to finish the job. The bond is usually issued as a certificate which carries a number that can be verified before the contractor begins the job.

Insurance for Contractors

Insurance, on the other hand, is issued to contractors of repute who have been in the business for quite some time as established professionals. It ensures your property from damage caused by the contractor during the course of work.

Some types of insurance also cater for the compensation of workers and employees of the contractor in the event of an accident. Despite the security of insurance, it doesn’t provide compensation for poor quality work and this is why you should only work with bonded and insured contractors to ensure that you’re covered in any situations that could arise from the contractor’s carelessness or incompetence.

• In the event that the contractor fails to carry out the job satisfactorily, you can contact the surety company for compensation by proving that the contractor failed to carry out the job to the standard agreed upon

Failure of a contractor to pay subcontractors as at when due thereby leading to the termination of the project is also grounds for contacting the surety company for compensation to complete the job

• In the event that the contractor disappears and cannot be found or contacted while the job is still going on, a bond ensures that you can call the surety company to avoid picking up the pieces all on your own

• In the event of injuries on your property, a bonded and insured contractor is covered and ensures that you will not be subject to liability.

It is clear that there are a lot of advantages in hiring only bonded and insured contractors as it guarantees protection from the possible financial loss which could be the case if a job is not completed. This means that uninsured contractors represent a serious risk because they may be incompetent, unlicensed or completely unqualified to do the job you have at hand and this means you might end up paying more than once. Before you give out any job or enter into any agreements, ensure that you ask for the bond certificate to be sure that you’re hiring an insured and bonded contractor.