What is the minimum contractor license bond amount required for a California B-General Building Contractor under Business and Professions Code Section 7071.6?
Correct Answer
C) $25,000
Business and Professions Code Section 7071.6 requires all licensed contractors to maintain a contractor license bond of $25,000. This bond protects consumers from financial loss due to contractor violations of the Contractors' State License Law. The $12,500 amount is for qualifying individual bonds, not the contractor license bond.
Why This Is the Correct Answer
California Business and Professions Code § 7071.6 mandates that every licensed contractor maintain a contractor license bond in the amount of $25,000. This bond runs in favor of the state and protects consumers who suffer financial harm from contractor violations of the Contractors State License Law. The $25,000 amount applies uniformly to all license classifications, including B-General Building.
Why the Other Options Are Wrong
Option A: $15,000
$15,000 was the bond amount required under an older version of § 7071.6 before the legislature increased it to $25,000. Candidates who have studied outdated materials may recall this figure. Always verify current statutory amounts; the CSLB exam tests the current law.
Option B: $12,500
$12,500 is the bond amount for a qualifying individual (RMO/RME) under § 7071.9, not the contractor license bond under § 7071.6. Confusing these two bond types is a common error. The qualifying individual bond covers the licensee's personal conduct, while the contractor license bond covers the business entity.
Option D: $50,000
$50,000 exceeds the statutory minimum. No general statutory provision requires a $50,000 bond for a standard B license. Contractors working on public works may face separate bonding requirements, but those are not the § 7071.6 contractor license bond.
Memory Technique
Think 'Two-Five for the License': $25,000 = contractor license bond. Half of that — $12,500 — covers just the qualifying individual. The business needs twice what the person does. You can also anchor it: a quarter of a hundred thousand dollars ($25K) is your 'quarter bond.'
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?
According to Business and Professions Code Section 7031, what is required when a licensed contractor supervises work performed by unlicensed employees on a construction project?
Under California Building Standards Code Title 24, which entity has the authority to issue building permits for most residential and commercial construction projects?
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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