According to California regulations, which of the following may be used as an alternative to a surety bond for the contractor's license bond requirement?
Correct Answer
A) All of the above
B&P Code Section 7071.5 allows contractors to substitute the required surety bond with a cash deposit, certificate of deposit, or savings account in a California bank, or an irrevocable letter of credit from a California financial institution in the same amount.
Why This Is the Correct Answer
B&P Code Section 7071.5 provides the broadest list of bond alternatives: (1) a cash deposit with the CSLB, (2) a certificate of deposit in a California bank, (3) a savings account in a California bank, or (4) an irrevocable letter of credit from a California financial institution. Because all three listed options are valid under this section, 'All of the above' is the correct answer.
Why the Other Options Are Wrong
Option B: Cash deposit with the CSLB
A cash deposit with the CSLB alone is correct but incomplete as an answer here, since the question asks which 'of the following' may be used — and the other options (C and D) are also valid. Selecting only B understates the full scope of acceptable alternatives.
Option C: Certificate of deposit in a California bank
A certificate of deposit in a California bank is indeed an authorized alternative under Section 7071.5, but again, choosing only C ignores that B and D are equally valid. The most complete and accurate answer is 'All of the above.'
Option D: Irrevocable letter of credit from a California financial institution
An irrevocable letter of credit from a California financial institution is also a valid alternative under Section 7071.5, but the same logic applies — selecting only D is incomplete when all options are valid.
Memory Technique
Section 7071.5 = 'FIVE alternatives' (the number 5 hints at multiple options): Cash to CSLB, CD in CA bank, Savings in CA bank, Letter of Credit from CA institution. If all four appear as choices, the answer is 'All of the above.'
More law-business Questions
Under B&P Code Section 7071.9, a contractor may deposit cash or securities instead of obtaining a surety bond. If a contractor chooses this option, where must the deposit be maintained and what happens to interest earned?
Under California's AB 5 law (Dynamex decision), which factor is NOT part of the ABC test for determining independent contractor status?
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According to B&P Code 7159.5, service and repair contracts must include specific provisions. Which statement is correct regarding these contracts?
Which of the following activities is exempt from California contractor licensing requirements under Business and Professions Code Section 7048?
Under Cal/OSHA regulations in Title 8 CCR Section 5192, Safety Data Sheets (SDS) for hazardous chemicals used on construction sites must be readily accessible to employees during which hours?
Under California Business and Professions Code Section 7071.9, in lieu of a surety bond, what alternative security may a contractor provide to satisfy the contractor license bond requirement?
According to Cal/OSHA regulations, which of the following is NOT a required element of a written Injury and Illness Prevention Program (IIPP)?
A homeowner requests that a B-General Building Contractor provide a certificate of insurance naming the homeowner as an additional insured on the contractor's general liability policy. Under California law, what is the contractor's obligation?
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