A bond and an insurance policy do different jobs. A contractor-license bond protects specified parties under the licensing law; it is not a substitute for general liability insurance or workers’ compensation. The bond amount also is not the premium you pay. S23
The CSLB $25,000 contractor license bond
The contractor-license bond amount is $25,000. A separate qualifying-individual bond may also be required, subject to the qualifying role and applicable ownership-based exemptions. Do not assume the main license bond automatically satisfies both requirements. S23
A surety payment can lead to a reimbursement claim under the applicable indemnity arrangements. Read those obligations instead of treating a bond as insurance that simply absorbs the contractor’s loss.
LLCs have additional requirements
A contractor LLC generally needs a $100,000 employee/worker bond in addition to its contractor bond. Its liability-insurance minimum starts at $1 million for five or fewer personnel of record, increasing by $100,000 for each additional person, up to $5 million. These are separate requirements with different purposes. S23
An LLC and S corporation tax treatment are not necessarily mutually exclusive: S corporation treatment is a tax election for eligible entities. California’s annual LLC tax and any additional fee depend on the applicable rules. Entity choice deserves a combined legal, tax and insurance assessment, not a one-line exam shortcut. S25
Do I need workers’ compensation if I have no employees in California?
Employees generally trigger coverage. Certain license classifications have additional requirements even without employees. Check CSLB’s current classification-specific rules before claiming an exemption. The broader expansion to all contractor licensees was deferred to 2028; an old assertion that it already applied universally in 2026 is incorrect. S24
To review these requirements, use three columns: requirement, protected party and amount or condition. That prevents a workers’ compensation answer from being confused with a bond or general-liability answer.