The $25,000 contractor's bond, and the second bond most qualifiers do not know they owe
In one paragraph
Every California contractor files a $25,000 contractor's bond. A qualifier who is not the sole owner or a general partner also files a second $25,000 bond of qualifying individual, unless they own 10% or more and certify it. The bond is not insurance for you: it pays homeowners, defrauded customers and unpaid employees, and then the surety collects from you. Here is what each bond does, who it protects, what it costs in practice, and the one word you may never put in an ad.
The rule
B&P 7071.6(a) requires a $25,000 contractor's bond as a condition of issuing, renewing and maintaining the license. B&P 7071.9(a) requires a second $25,000 bond of qualifying individual whenever the qualifier is neither the proprietor, a general partner nor a joint licensee, unless the RMO owns 10% or more of the voting stock (or an LLC qualifier owns at least a 10% membership interest) and certifies that on the CSLB form.
Why it matters
The qualifier bond is the item most often missed on the bond and fee letter, and the application is void 90 days after the notice if it is not on file. A paid bond claim is not the end of it either: the surety recovers from you, CSLB is notified within 30 days, and the license cannot be renewed while a judgment or admitted claim above the bond amount is unpaid.