A contractor's license bond has been paid out to a claimant for $8,000. How many days does the contractor have to restore the bond to its full amount to avoid license suspension?
Correct Answer
D) 90 days
Under B&P Code Section 7071.8, contractors have 90 days to restore their bond to the full required amount after any payout or face license suspension.
Why This Is the Correct Answer
Under B&P Code Section 7071.8, when a contractor's license bond is reduced by a payout, the contractor has 90 days to restore the bond to its full required amount. Failure to do so within this period results in automatic license suspension.
Why the Other Options Are Wrong
Option A: 30 days
30 days is too short. The statute provides a 90-day window, giving contractors reasonable time to arrange for a new or supplemental bond from their surety company.
Option B: 120 days
120 days exceeds the statutory deadline. The law requires restoration within 90 days, not 120. Choosing this option reflects a misremembering of the timeframe.
Option C: 60 days
60 days is half the actual period. While it may seem like a reasonable business timeline, it does not match the 90-day statutory window under B&P Code Section 7071.8.
Memory Technique
Associate '90 days' with '90% effort': restoring a bond takes serious effort, and you have 90 days to do it. The number 90 also appears in the bond-forfeiture re-filing rule — consistent pattern across bond-related timelines.
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A C-10 electrical contractor's license bond is $25,000. If a homeowner files a valid claim for $18,000 in damages and the surety pays out, what happens to the contractor's license?
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