Q: What is the reason behind the bond increase?
A: Surety bond companies generally price the bond centered on their expected risk exposure based on past claims. As we see an increase in the cost of goods and services, this results in more significant claims. An analysis of claims by the State of California over the past six years has shown that the current bond compacity of $15,000 is no longer sufficient to cover most losses, ultimately resulting in a capacity increase like we are experiencing now to $25,000. 

Q: Who made this decision?
A: The CA State Senate signed Bill 607 into law, changing the California contractor license bond amount from $15,000 to $25,000 and from $12,500 to $25,000 for the bond of qualifying individuals.

Q: What are my options?
A: Contractors have two options.

  • Option 1 - Pay a prorated premium to increase their existing bond to the new required limits and keep the same bond term.
  • Option 2 - Decline to pay a prorated premium and have their bond term shortened.

Q: Can I opt out?
A: Contractors can opt out of paying the prorated premium to increase their existing bond and accept the shortened bond term, but no contractor can avoid the bond limit increase. This is a state-mandated requirement, and to hold an active contractor’s license in CA, a bond of $25,000 must be posted with the CSLB.

Q: What is the cost to me?
A: The Surety company will determine the cost based on the remaining term on the existing bond and the increased bond compacity amount. All contractors with a current and active bond will receive an invoice outlining these details in the coming weeks.

Q: Will you let me know when my bond expiration date is if I opt not to pay the premium?
A: Yes, the provided invoice will outline the prorated premium to increase the existing bond to the new required limits and to keep the same bond term and the shortened date if one chooses to opt out of the premium requested.

Q: Where can I go for more information?
A: More information about the bond increase can be found on the California State Licensing Board’s (CSLB) website: