A contractor has an obligation not to commit any violation of contractor license law that is grounds for disciplinary action against the license. If the contractor does not comply with the conditions of the bond, a claim can be filed with the surety company.
Claims against a surety company may be filed by homeowners, any person damaged by a willful and deliberate violation of a construction contract, employees damaged by the contractor's failure to pay wages, or an express fund damaged as a result of the contractor's failure to pay fringe benefits for eligible employees. (A court case has held the express trust fund provision superceded by federal law.)
Consumers must file surety bond claims with the surety company that wrote the bond within specified time frames. The CSLB does not process claims against surety companies. Surety companies will investigate any claim filed against a bond, and the CSLB will investigate any complaint filed against the license.
A license bond is canceled 30 days from the date that CSLB receives a cancellation notice from a bond company. If a bond reinstatement notice is not received by CSLB or a replacement bond is not received by CSLB before the end of the 30-day period, the license is suspended.