State requirements

California Contractor License Suspension for Lapsed Insurance

What happens to a California contractor's license if a required bond or workers' compensation policy is cancelled. Learn the reasons for suspension.

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Short answer

A California contractor's license will be suspended if a required bond or workers' compensation policy lapses. Any work performed during a suspension is considered unlicensed. Scope of Cover found a bond suspension can be lifted if the surety company provides a rescission notice within 90 days of the bond's cancellation. For a workers' compensation lapse, the suspension is lifted after the Contractors State License Board (CSLB) receives and processes acceptable proof of coverage.

Key figures

90 days A bond suspension can be lifted if a rescission notice is received from the surety company within 90 days of the bond cancellation date. CA · as of Oct 2, 2026
Source quote
The rescission notice must be received within 90 days of the bond cancellation date
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#What Happens When a Contractor's Bond Is Cancelled?

A California contractor's license is placed under bond suspension if the surety company cancels the bond. A suspension also occurs if a judgment or payment of a claim reduces the amount of a required bond or cashier's check.

Any work performed while a license is suspended is considered unlicensed. This can result in disciplinary action.

#What If a Workers' Comp Policy Lapses?

California contractors must maintain continuous workers' compensation coverage. Failure to maintain this insurance will result in the suspension of a contractor's license.

A license is suspended if the workers' compensation policy expires or if the insurance company cancels it.

#How Is a Suspended License Reinstated?

A suspension from a cancelled bond can be lifted. This happens if a rescission notice from the surety company is received within 90 days of the cancellation date.

A workers' compensation suspension is lifted after acceptable proof of workers' compensation insurance coverage is received and processed at the CSLB's Headquarters.

Frequently asked questions

What happens if a contractor works with a suspended license in California?

Any work performed while a California contractor's license is suspended is considered unlicensed work and may lead to disciplinary action.

Can a license be suspended if a claim reduces the bond amount?

Yes, a California contractor's license will be suspended if a judgment or the payment of a claim reduces the amount of a required bond.

Does an expired workers' compensation policy cause a license suspension?

Yes, a California contractor license will be suspended if the workers' compensation insurance policy expires.

How long do I have to fix a cancelled bond before the suspension is permanent?

A bond suspension can be reversed if a rescission notice is received from the surety within 90 days of the bond's cancellation.

Sources

  1. CSLB: Bond suspensionsContractors State License Board · retrieved
  2. CSLB: Suspended licenseContractors State License Board · retrieved
  3. CSLB: Workers' compensation insurance for licenseesContractors State License Board · retrieved

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