A contractor bond, or contractor's license bond, is a contract by which a surety company promises that the contractor listed on the contractor's license bond they have issued won't commit any violation of contractor license law within their state that they are licensed. California requires that all contractors have a license bond. So besides the truth that it's what the law states, here are why every contractor needs a company bond.Hit on California contractor to explore more about our services and sites. Hope you ll like our more services.
The California Contractors State License Board (CSLB) keeps tabs on contractors which have bonds and those who don't. In the event that you cancel your bond, the surety company with that you simply had the bond must send a cancellation notice to the CSLB. If an attachment reinstatement notice is not received by the CSLB or perhaps a replacement bond is not received by the CSLB within 30 days from when they get the cancellation notice, your contractor's license is likely to be suspended.
In their state of California it is illegal for an unlicensed person to execute contracting focus on any project valued at $500 or even more in labor and materials. With no license you are very unlikely to have hired, and if you're hired, if you're caught working with out a license you are able to face serious charges from the CSLB.
A Sound Surety Company
If you should be a company you probably already know just that construction projects don't always work out as planned - even though everything appears to go accordingly. Whether because of human error, faulty materials, or weather-related, claims against a surety company may be filed by any persons damaged by willful and/or deliberate violation of a development contract. So even when you're not personally responsible, or it wasn't deliberate, someone still might file a claim against your company. In case this happens, the surety company with that you simply hold your license bond will pay out the claim.
Because a company bond is not actually insurance, in case of an incident claim payout you have to repay the surety company any amount paid in your behalf. Experienced surety companies will continue to work to safeguard you against inaccurate, frivolous, or fraudulent claims, so because of this it's important to find the most reliable and experienced surety company for the contractor bond. The more experience they have fighting claims the less of a chance you will have to payout a claim one day and the more your company is protected.