According to B&P Code Section 7071.17, which entity issues the contractor license bond?
Correct Answer
A) An admitted surety insurer
B&P Code Section 7071.17 requires that contractor bonds be issued by a surety company admitted to do business in California.
Why This Is the Correct Answer
B&P Code Section 7071.17 specifically requires that contractor license bonds be issued by a surety company that is admitted to do business in California. 'Admitted surety insurer' is the precise statutory term — the insurer must be licensed by the California Department of Insurance to operate in the state.
Why the Other Options Are Wrong
Option B: Any insurance company
'Any insurance company' is too broad. Not all insurance companies are authorized to issue surety bonds, and not all are admitted to do business in California. The statute specifically requires an admitted surety insurer, not just any insurer.
Option C: The CSLB directly
The CSLB does not issue bonds. The CSLB requires bonds and verifies them, but the bond itself is a contract between the contractor, the surety company, and the obligee. The CSLB is a regulatory body, not a bonding entity.
Option D: A state-approved bonding agency
'State-approved bonding agency' is a vague description that does not match the statutory language. The correct term is 'admitted surety insurer' — a company admitted by the California Department of Insurance to write surety bonds in the state.
Memory Technique
ADMITTED = allowed in. The surety company must be admitted — i.e., officially allowed — to do business in California. Think of it as the surety needing a California 'admission ticket' before it can issue contractor bonds.
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A contractor's surety bond is $25,000. If a claimant is awarded $18,000 and bond costs are $2,000, what amount remains available for future claims?
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