Claims and lapses by the numbers
- $25,000
- California contractor license bond, required since Jan 1, 2023
- CA Business & Professions Code, 2023
When a claim is filed
A claim does not pay out automatically. The surety investigates first. If the claim is valid, the surety pays it, up to the $25,000 bond amount. Then you reimburse the surety in full, because a bond guarantees your obligations to others, it is not insurance that absorbs your loss.
If you are on the receiving end of one right now, the step-by-step of what happens after a claim is filed covers the reservation of rights letter, what the surety will ask you to produce, and what silence costs you.
That reimbursement duty is the indemnity agreement doing its job. A paid claim is also a mark on your record, which can raise your rate at renewal or move you into hard-to-place territory, and it is one of the more common reasons a bond gets declined later.
If your bond lapses
- The CSLB can suspend your license. An active bond on file is a condition of holding your license.
- You cannot work legally while suspended. Jobs stall and clients walk until the bond is reinstated.
- Reinstating takes time. A gap is far more expensive than the premium you skipped, so do not let the bond drop.
Protecting your license
The fix is simple: renew on time and keep the bond active with no gap. We track your renewal and re-shop the bond so price is never a reason to let it lapse. If you are already past a disciplinary action, see the disciplinary bond, and the contractor license bond page covers keeping your standard bond current.