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.
A paid claim is also a mark on your record, which can raise your rate or move you into hard-to-place territory at renewal.
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.