How often do I need to renew my business bond?

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While a California construction license renews every two years, a bond is dependent on the contract set forth by the bond company. More often than not, bond cycles are different than the license cycles.

Bonds are typically offered from one to five year periods, depending on the credit of the contractor. Construction companies with good credit will usually get an offer for a multi-year bond. These bonds are usually offered at a lower rate than the single year bonds. The discount can be as high as 20%. Contractors with good credit and with plans to stay in business for several years will usually take advantage of these discounted rates.

When the bond does expire, the construction company will need to go through the bonding process again. It is recommended to begin the process at least 45 days prior to the bond expiration date so that there is enough time to receive the bond and for the state board to receive and process the bond before the expiration date. If the state does not receive the new bond in time, the contractor license will be suspended and additional fees will need to be paid.


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