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MMBONDING
Licensing

The California Contractor Bond Stack: What You Need Together

Every licensed California contractor needs the $25,000 license bond. What you add on top, the LLC worker bond, workers' comp, contract bonds, and insurance, depends on your business. Here is the whole stack, by type.

Illustration for the guide: The California Contractor Bond Stack: What You Need Together

Every contractor: the license bond

There is one bond no California contractor can skip. Every CSLB-licensed contractor, sole proprietor or corporation, new or renewing, must carry the $25,000 license bond under BPC §7071.6. It is the base of the stack, and it is the same for everyone. Start with the contractor license bond.

If you are an LLC: add the worker bond

License your business as an LLC and California adds a second, larger bond on top of the license bond. The $100,000 LLC employee/worker bond, required under BPC §7071.6.5, protects your employees' wages and benefits. A corporation or sole proprietor does not carry it; an LLC does. See the LLC worker bond.

If you have employees: workers' compensation

The moment you hire employees, California requires workers' compensation coverage. It is not a surety bond; it is insurance, and it is mandatory for employers. Contractors in a few classifications must carry it even without employees, so verify your situation with the CSLB.

If you bid public or larger commercial work: contract bonds

Move into public works or larger commercial projects and owners will require contract bonds, project by project. These are not license bonds; they back a specific job.

  • Bid bond. Guarantees you will honor your bid if you win the award.
  • Performance bond. Guarantees you finish the project per the contract.
  • Payment bond. Guarantees your subcontractors and suppliers get paid.

And insurance

Bonds are not insurance for your business. Most contractors also carry general liability insurance, and many clients and general contractors require it before you set foot on site. It is standard, separate from your bonds, and worth having. Our bonding vs. insurance guide explains the difference.

Here is the stack by business type:

  • Sole proprietor, no employees: the $25,000 license bond, plus general liability insurance.
  • Corporation with employees:the license bond, workers' compensation, and general liability insurance.
  • LLC with employees: the license bond, the $100,000LLC worker bond, workers' compensation, and general liability insurance.
  • Anyone bidding public or larger commercial work: add bid, performance, and payment bonds per project.

We place the bonds in this stack, license, LLC worker, and contract bonds, and point you to the right coverage for the rest. Underwriting still applies, and tougher credit is welcome.

Questions

FAQs

Reviewed by Michael Melshenker, CEO. Updated June 2026.

Which bonds does every California contractor need?
Every CSLB-licensed contractor needs the $25,000 license bond under BPC §7071.6. That one is universal. Additional bonds depend on your structure and the work you take on.
What extra bond does an LLC contractor need?
An LLC adds the $100,000 employee/worker bond under BPC §7071.6.5, on top of the $25,000 license bond. Corporations and sole proprietors do not carry it.
Do I need workers' compensation?
If you have employees, yes, California requires workers' compensation. Some contractor classifications must carry it even with no employees. It is insurance, not a bond, so confirm your requirement with the CSLB.
When do I need bid, performance, and payment bonds?
On public works and most larger commercial projects, owners require these contract bonds job by job. They back a specific project, unlike the license bond, which covers your license itself.