Surety Bond Encyclopedia

Contractors Disciplinary Bond - Statewide in California

Brief Summary

The disciplinary bond is the step between a suspended or revoked California contractor's license and getting back to work. The Registrar sets the amount, and it sits on top of your regular $25,000 contractor's bond rather than replacing it. We write it on the Attorney General approved form so CSLB can accept it and the reinstatement can move forward.

Business and Professions Code 7071.8 requires a disciplinary contractor's bond before CSLB will issue, reissue, renew or restore a license after disciplinary suspension or revocation, including a revocation that has been stayed. The Registrar fixes the amount based on the seriousness of the violation, with a floor of $25,000 and a ceiling of ten times the $25,000 contractor's bond, which is $250,000. The bond stays on file for at least two years.

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How to Apply for a Contractors Disciplinary Bond:

Get the bond amount from your CSLB decision, citation or reinstatement letter. The Registrar sets it between $25,000 and $250,000.
Have the license number, the exact licensee name on CSLB records and the name of every qualifier and officer on the personnel of record.
Provide owner and qualifier names, home addresses and Social Security numbers for underwriting.
Be ready to explain the disciplinary action and what has been done to resolve it.
Receive the executed disciplinary bond on the Attorney General approved form, signed by the surety's attorney in fact.
Make sure CSLB headquarters receives the bond within 90 days of its effective date, along with your active contractor's bond.

Detailed Information About the California Contractors Disciplinary Bond:

Your amount comes from the Registrar

There is no single price tag on this bond. Business and Professions Code 7071.8(b) lets the Registrar of Contractors fix the sum based on the seriousness of the violation. The minimum is $25,000 and the maximum is ten times the contractor's bond required by section 7071.6, which is currently $25,000. That puts the range at $25,000 to $250,000. The figure you need is the one stated in your CSLB decision or reinstatement letter.

Who it follows

The bond is not limited to the license that was disciplined. Section 7071.8(a) applies it to a person whose license was suspended or revoked, a qualifying individual on a license during the time the cause for discipline occurred, officers, directors, managers, partners or members of the personnel of record who knew of or took part in the violation, and any partnership, corporation, LLC or other firm that brings one of those people onto its personnel of record. A new company with a disciplined officer or qualifier can trigger the requirement.

It does not replace your other bonds

The disciplinary bond is in addition to, may not be combined with, and does not replace the $25,000 contractor's bond or a bond of qualifying individual. Only one disciplinary bond is required for each application or license subject to the requirement.

How long it stays on file

The bond must remain on file with the Registrar for at least two years, and longer if the Registrar decides. The clock only runs while the license is current, active and in good standing. If the license is suspended or goes inactive during the period, the time is extended until the license has been in good standing for the full required period.

Filing with CSLB

CSLB requires bonds to be written by a surety company licensed through the California Department of Insurance, on a form approved by the Attorney General's Office, signed by the surety's attorney in fact, and received at CSLB headquarters within 90 days of the bond's effective date. CSLB also accepts a cashier's check in lieu of a surety bond through its Licensing department.

How premium is set

The surety prices the bond on the amount the Registrar set, the owners' credit and financial statements, and the facts behind the discipline. Because the bond follows an enforcement action, underwriting looks closely at what happened and what has been resolved since.

Eligibility and Requirements for a California Contractors Disciplinary Bond:

Surety company licensed through the California Department of Insurance.
Bond amount set by the Registrar, not less than $25,000 and not more than ten times the $25,000 contractor's bond.
Filed in addition to the contractor's bond and any bond of qualifying individual, never combined with them.
License kept current, active and in good standing for at least two years while the bond is on file.
One disciplinary bond per application or license subject to the requirement.

California Contractors Disciplinary Bond FAQs:

How much is my disciplinary bond?

The Registrar sets it based on the seriousness of the violation. Under Business and Professions Code 7071.8 it can be no less than $25,000 and no more than ten times the $25,000 contractor's bond, so $250,000 is the maximum. Your CSLB decision or letter states the exact figure.

Can my regular contractor's bond count toward it?

No. The disciplinary bond is in addition to, may not be combined with, and does not replace any other bond required to keep the license active. You carry both.

When can I cancel the disciplinary bond?

It must stay on file for at least two years, or longer if the Registrar requires. The period only counts while the license is current, active and in good standing, so a suspension or inactive status pushes the end date out.

I was an officer at a company that lost its license. Does this affect my new company?

It can. Section 7071.8 reaches a new firm whose officer, director, manager, partner or qualifier held a disciplined license, or was on the personnel of record and knew of or took part in the violation. CSLB can require the disciplinary bond before issuing or renewing the new firm's license.