California Contractor Bond Requirements

California requires licensed contractors to maintain a $25,000 CSLB surety bond as a condition of their license. Public works projects require additional payment and performance bonds. Here is how each type works — and how to make a claim against them.

CSLB License Bond — $25,000

Under Business & Professions Code §7071.6, every California licensed contractor must maintain a surety bond in the amount of $25,000 with the Contractors State License Board. This bond protects property owners, subcontractors, and suppliers against losses resulting from the contractor's failure to perform or pay.

Filing a claim against the CSLB bond is separate from filing a mechanics lien. Bond claims are typically processed through the surety company, not the CSLB directly. The surety investigates the claim and, if valid, pays up to the $25,000 bond limit.

Important limitation: The $25,000 CSLB bond is a single bond shared among all potential claimants. If multiple claims are filed against the same contractor's bond, all claimants share the $25,000 pro rata. For large claims, the CSLB bond alone is rarely sufficient — a mechanics lien or civil lawsuit is necessary to fully recover.

Payment Bonds on Public Works Projects

On California public works projects, contractors are required to post a payment bond equal to 100% of the contract amount (Public Contract Code §9554 for state projects; Government Code provisions apply to local agencies). These bonds are separate from the CSLB license bond and are specific to the individual project.

Subcontractors and suppliers on public works projects should always request a copy of the payment bond at the start of the project. Bond claims on public projects must be submitted within 6 months of project completion.

Performance Bonds

A performance bond guarantees that the contractor will complete the project according to the contract terms. Performance bonds protect the project owner — not subcontractors or suppliers. If the contractor defaults or abandons the project, the owner can make a claim against the performance bond and the surety will either complete the project or pay the cost to do so, up to the bond amount.

Lien Release Bonds (Discharge Bonds)

A lien release bond is used by property owners to remove a mechanics lien from the property title. Unlike license bonds or payment bonds, a lien release bond is obtained after a lien has been filed and is specific to that lien. See our lien release bond guide for details.

Frequently Asked Questions