California Disciplinary Bond

California Disciplinary Bond

A California-licensed contractor with a prior or current license suspension due to disciplinary action is required to purchase a court-ordered Contractors Disciplinary Bond. Specific incidents that trigger the order of a disciplinary bond are
a) being convicted of violating specific BUSINESS AND PROFESSIONS CODES (BPC) meant to govern licensed construction professionals
b) being issued a license citation by the registrar according to BPC 7027.8 or c) the violation conviction or citation action above is deemed to have caused substantial injury to the public.  



Our team of contractor bond experts can help answer your disciplinary bond questions immediately. Call us at (916) 836-5330, we always answer the phone.

Jet Surety is the specialist in construction surety. This profound understanding of the rigorous disciplinary bond requirements coupled with our direct to the contractor approach, allows us to eliminate the presence of an insurance agent, helping avoid unnecessary broker fees that inflate bond costs.

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How Much Does a Disciplinary Bond Cost?

Each disciplinary bond has unique bond limits with the legal requirement stating the bond limit minimum shall be twenty-five thousand dollars ($25,000) with a maximum of no more than 10 times ($250,000) as per BPC, Section 7071.8 Contractors can expect to pay 2.5% to 25% of the bond limit, depending on several credit factors. If the disciplinary bond limit required by the Contractors State License Board is above $50,000, our team will request additional financial information, including cash on hand and net assets.

The provided chart is an example of how required limits and standard underwriting affect your disciplinary bond price:

Pricing ClassBond LimitMonthlyAnnual*
Elite$35,000$76$756
Preferred$60,000$324$3,240
Industry-Standard$30,000$162$1,620
Underwriting Review$25,000$531$5,313
*Not all pricing tiers are shown.
California Disciplinary Bond

The direct-to-you offering of these bonds allows Jet to present monthly payment options and no hidden fees throughout the life of the bond.

What Do I Need to Start My Online Application?

Once the CA state registrar has issued the disciplinary order, which will include the bond limit and term requirements (2 years, 4 years, 7 years, etc) simply click the “Quote” button to start Jet’s bond precise application. To ensure the application process is swift, make sure to have a copy of the issued order and the application fee number or updated license number the bond is intended to be written for. If the prior license has been revoked, the CSLB will not allow the bond to be issued on this existing license, so it is imperative that you know what license number the bond must be issued for.

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Why Would I Need to Have a Disciplinary Bond?

Each disciplinary order is singularly associated with the situation that led to the complaint filing and subsequent license actions. Despite the existence of over 300+ violations that can lead to a disciplinary action, there are common reasons a contractor may need a Disciplinary Bond including:

License Violations: Contractors may face disciplinary action if they violate the terms of their license, such as operating without a valid license or engaging activities outside of their issued license classification.

Code of Ethics Breach: Failure to uphold ethical standards and professional conduct may lead to disciplinary measures.

Enforcement of Judgments: In cases where a contractor is subject to legal judgments related to their business activities, the disciplinary bond is used to satisfy these judgments. This ensures that the contractor has the financial means to address legal liabilities.

Fraud or Misrepresentation: Providing false information on a license application or engaging in fraudulent activities.

Criminal Convictions: Convictions for certain crimes may lead to disciplinary actions, especially if they are relevant to the profession.

Incompetence or Negligence: Providing substandard services, failing to meet professional standards, or being negligent in carrying out duties.

What Is the Process for How CSLB Disciplinary Actions Are Handled?

As with all license policies & procedures of the Contractors State License Board, the annually-issued California Contractors License Law & Reference Book lays out the full disciplinary process from start to finish. 

Step 1 – Determine Party Authority

Once the completion of complaint documents against a contractor are filed, the CSLB assesses whether the reported misconduct is within its purview to rule upon via arbitration or citation. Cases involving criminal violations are forwarded to the appropriate legal authorities, to allow for proper court review and judgment. The License Board will provide written confirmation that the complaint has been received. A notice also is sent to the contractor to encourage resolution of the complaint without further intervention by CSLB.

Step 2 – Offer Two-party Settlement Options

The CSLB will usually promote a collaborative resolution for filed disputes between the contractor and the petitioner if the complaint is found to qualify for arbitration, whether mandatory or voluntary. If mediation is unsuccessful and the CSLB finds the complaint to be appropriate for handling in Small Claims Court or settlement via a surety claim, they will offer information about local courts in your area to file an action as well as how to go about filing a license bond claim.

Step 3 – Conduct an Investigation

While it is listed as the third step, this action is happening in conjunction with offering mediation or the claims court options. Not all filed complaints can be handled with a form of mediation, as those options have specific criteria to be offered as a solution. Should the CSLB suspect that the contractor has egregiously violated state licensing regulations, they will further investigate the complaint to determine actions. Investigation procedures may include interviews with the contractor, other parties to the contract in question as well as anyone who is believed to be able to provide pertinent information. 

The findings of the investigation can lead to either Step 4 or Step 5 of the complaint process.

Step 4 – Issue Minor License Actions 

The license actions will be issued based on the severity of the violations, the number of occurrences the licensed contractor has historically, as well as the cooperation in communication throughout the investigation. 

Less severe repercussions for lesser violations can be as minor as an advisory note, or a letter of admonishment requiring the licensee to create and submit an action plan to show compliance measures, with the action appearing on the public license record for a few years. 

With slightly higher risk license violations the CSLB is warranted to issue a financial penalty in the form of a license citation, with fines ranging from $8,000 for most violations up to $30,000 in civil penalties. 

Step 5 – Court Hearing and Disciplinary Actions Issued

When the investigation leads to findings of egregious legal or code violations, the Board’s registrar will escalate the disciplinary action by filing an accusation with the CA attorney general. This process informs all parties involved in the complaint of the CSLB’s intention to either suspend or revoke the license(s) in question. 

As with all actions taken by the License Board, the contractor may be given the opportunity to either resolve the matter appropriately without the CSLB’s handling or, if a hearing is required they may defend themselves in front of the judge. 

Final corrective actions are issued after the case has been reviewed and a judgment has been decided.


License Revocation		The contractor’s license is rescinded for a minimum of 1 year, potentially up to 5 years. Once this time has passed, the issuance of a new contractor's license will be contingent upon the acquisition of a disciplinary bond.
 License SuspensionInstead of full license revocation, the court will issue a suspension. Operating during the suspension period is not allowed and the reinstatement of the license is contingent on payment of penalties and a disciplinary bond must be filed. 
License ProbationThe licensee is required to adhere to specific terms and conditions to prevent license suspension or revocation. Additionally a disciplinary bond is required to sustain operations throughout the probation period. Violation of any agreement terms will lead to the suspension or revocation of the license.
Court InjunctionAfter the investigation and hearing have concluded that a clear breach of the law has occurred, CSLB may seek legal intervention and request a court injunction to promptly halt the illegal activity.
Criminal ChargesThe CSLB also has the authority to forward the disciplinary complaint to the district attorney's office for potential criminal prosecution, should a court injunction not be sufficient for handling identified criminal activity. 
Common Disciplinary Actions 

How to Renew My Bond

For annually-purchased bonds, see Jet’s process to renew your bond. It’s simple!

How to Cancel My Bond

See the details surrounding canceling your bond

Bond Claim Process

Be aware of what causes a claim and the process for handling a claim.

What Other Contractor Bonds Do I Need in California?

The filed disciplinary bond does not negate the requirement for a $25,000 Contractor License Bond to also be filed with the Contractors State License Board. .

Some licensed businesses using a Responsible Managing Officer (RMO) to qualify the license classification are required to carry a $25,000 Bond of Qualifying Individual (BQI) when the listed RMO owns less than 10% of the voting stock of the company. 

Call (916) 836-5330 or email cacontractor@jetsurety.com and our team will promptly answer your questions.

Disciplinary Bond Form

Notary Bond Application:

X

Business Information:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Employee Dishonesty Bond Application:

Business Information:

Business Description:

Coverage Requirements:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Contract Bond Application:

X

Business Information:

Owner Information:

Job Details:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Worker's Compensation Application:

X

Business Information:

Business Description:

Coverage Requirements

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information: