Contractors are legally required to maintain a form of security deposit as a guarantee that they will perform in a good and workmanlike manner. Surety bonds are commonly used for this purpose.
Before an active contractor’s license can be issued or renewed, or an inactive license made active, the licensee must have a current Contractor’s Bond, or an approved alternative to the bond, on file with the CSLB. The Contractor’s Bond shall be in the amount of $15,000 for all classifications. In addition, a Qualifying Individual must carry a $12,500 bond or an approved alternative to the bond, on file for each responsible managing employee (RME). You must also have a $12,500 Bond of Qualifying Individual on file for each responsible managing officer (RMO) unless the RMO owns 10 percent or more of the voting stock of the corporation.