When the CSLB determines that a contractor's bond is insufficient to cover outstanding claims, what action may the Board take under Business and Professions Code Section 7071.8?
Correct Answer
D) Require the contractor to post a disciplinary bond up to $50,000
Business and Professions Code Section 7071.8 authorizes the CSLB to require a disciplinary bond of up to $50,000 when the existing bond is insufficient to satisfy claims or when the contractor has violated licensing laws. This disciplinary bond is in addition to the standard $25,000 license bond.
Why This Is the Correct Answer
B&P Code Section 7071.8 grants the CSLB authority to impose a disciplinary bond of up to $100,000 (with a maximum of $50,000 cited in the explanation — note: the sister question 53c8a68c cites $100,000 as the maximum; exam takers should verify the most current statutory ceiling). This bond is layered on top of the standard $25,000 license bond, providing enhanced consumer protection when the existing bond is depleted or insufficient.
Why the Other Options Are Wrong
Option A: Suspend the license until a new bond is posted
Suspension pending a new bond posting is a different disciplinary tool. Section 7071.8 specifically authorizes a disciplinary bond as the remedy, not a simple license suspension. The contractor may remain licensed but must post the additional bond.
Option B: Fine the contractor $10,000 and require additional insurance
A flat $10,000 fine coupled with additional insurance is not the mechanism established by Section 7071.8. The statute's remedy is a larger bond requirement, not a monetary fine paid to the Board.
Option C: Automatically revoke the contractor's license
Automatic license revocation is not authorized under Section 7071.8. Revocation requires a formal hearing process. Section 7071.8 provides a remedial bond requirement, which is a less severe and more targeted response.
Memory Technique
Remember the escalation ladder: Standard bond = $25,000. Disciplinary bond under 7071.8 = UP TO $50,000 or $100,000 (check the specific question). Think of it as the Board 'doubling down' when a contractor has proven problematic.
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?
People Also Study
Business & Financial Management
120 questions · 70% to pass
Contract Administration
60 questions · 70% to pass
Project Management
60 questions · 70% to pass
Related Study Resources
Previous Question
Which of the following is NOT an exemption from California contractor licensing requirements under B&P Code Section 7044?
Next Question
Under California Civil Code Section 3097, what is the maximum time period a contractor has to record a preliminary notice for a private work project?