CSLB Law & Business Test Questions with Answers Graded A+
Bonds can be purchased from bonding companies for
1-2%
% of the original contract price.
This acts as an assurance that the contractor will be able
Bid Bond
to complete the job as described in the contract.
This guarantees a contractor will complete the project
Performance Bond or Contract Bond
according to the agreed upon terms & conditions.
This guarantees that subcontractors and suppliers will be
Payment Bond
paid by the contractor for properly performed work.
Payment Bonds are required for federal government con-
$35,000
tracts over $ .
This covers the business owner in case of employee dis-
Fidelity Bond
honesty or theft.
Contractors must file a contractors bond OR submit a cash
$15,000
deposit with the CSLB for $ .
The value of a contractors bond must be $ _______________________ $15,000
The contractors bond must be filed with the CLSB within
90
days from the bond ettective date.
True or False: A contractor must identify their type of
insurance when referring to themselves as "bonded" or True
"insured" in advertisements or publications.
A business must submit a separate $ bond for $12,500 (They can be exempt if the RMO can certify own-
RMEs or RMOs. ership of 10% or more of the voting stock in the company.)
A Limited Liability Surety Bond for $ is re-
quired in addition to the contractors bond for an LLC $100,000
license.
This must be filed with the Registrar after a license has
Disciplinary Bond
been revoked or denied.
, CSLB Law & Business Test Questions with Answers Graded A+
True or False: A Disciplinary Bond can be combined with False. It's an additional requirement and may not be filed
any other bond. in place of another bond.
The Disciplinary bond amount ranges from to
$15,000 up to 10x the amount of the contractor's bond
, depending on the violation.
The Disciplinary Bond must be valid & on file with the
2 years
Registrar for how long?
How soon should the Disciplinary bond be filed with the
Within 90 days
CSLB?
All of these are approved alternatives to surety bonds
except:
A) Certificate of deposit
B) Cash C) Stocks or fluctuating investments
C) Stocks/fluctuating investments
D) Savings & loan investments
E) U.S. government bearer bond
A license may be suspended if:
A) One or more of the required bonds are canceled by
their surety company
B) The bond amount is reduced by a judgment or pay-
D) All of the above
ment claim
C) There's failure to maintain either the Disciplinary bond
or cash deposit for the required time period
D) All of the above
What must a contractor submit before a contractor's li-
Proof of worker's compensation insurance
cense is issued?
Within 30 days
Bonds can be purchased from bonding companies for
1-2%
% of the original contract price.
This acts as an assurance that the contractor will be able
Bid Bond
to complete the job as described in the contract.
This guarantees a contractor will complete the project
Performance Bond or Contract Bond
according to the agreed upon terms & conditions.
This guarantees that subcontractors and suppliers will be
Payment Bond
paid by the contractor for properly performed work.
Payment Bonds are required for federal government con-
$35,000
tracts over $ .
This covers the business owner in case of employee dis-
Fidelity Bond
honesty or theft.
Contractors must file a contractors bond OR submit a cash
$15,000
deposit with the CSLB for $ .
The value of a contractors bond must be $ _______________________ $15,000
The contractors bond must be filed with the CLSB within
90
days from the bond ettective date.
True or False: A contractor must identify their type of
insurance when referring to themselves as "bonded" or True
"insured" in advertisements or publications.
A business must submit a separate $ bond for $12,500 (They can be exempt if the RMO can certify own-
RMEs or RMOs. ership of 10% or more of the voting stock in the company.)
A Limited Liability Surety Bond for $ is re-
quired in addition to the contractors bond for an LLC $100,000
license.
This must be filed with the Registrar after a license has
Disciplinary Bond
been revoked or denied.
, CSLB Law & Business Test Questions with Answers Graded A+
True or False: A Disciplinary Bond can be combined with False. It's an additional requirement and may not be filed
any other bond. in place of another bond.
The Disciplinary bond amount ranges from to
$15,000 up to 10x the amount of the contractor's bond
, depending on the violation.
The Disciplinary Bond must be valid & on file with the
2 years
Registrar for how long?
How soon should the Disciplinary bond be filed with the
Within 90 days
CSLB?
All of these are approved alternatives to surety bonds
except:
A) Certificate of deposit
B) Cash C) Stocks or fluctuating investments
C) Stocks/fluctuating investments
D) Savings & loan investments
E) U.S. government bearer bond
A license may be suspended if:
A) One or more of the required bonds are canceled by
their surety company
B) The bond amount is reduced by a judgment or pay-
D) All of the above
ment claim
C) There's failure to maintain either the Disciplinary bond
or cash deposit for the required time period
D) All of the above
What must a contractor submit before a contractor's li-
Proof of worker's compensation insurance
cense is issued?
Within 30 days
