California licensed contractors are required to have a contractor’s license bond. It’s important to know what bonds do and do not cover. Some bonds are designed to protect you against substandard work that does not meet with local building codes. Bonds do not assure the financial or professional integrity or competency of a contractor. Institutional lenders such as savings and loans, insurance companies or commercial banks generally require licensed contractors to secure bonds for large jobs.

Bonds may be classified as:

Contractor’s License Bonds

Licensed contractors are required to have a contractor’s license bond of $12,500 (as of January 1, 2007). This bond is written to cover any project the contractor agrees to perform. But, be aware, this bond is often not enough to cover multiple complaints made against it or your project if it’s worth more than the value of the bond.

For more information about bonds, read the CSLB publication, A Guide to Contractor License Bonds.