Real Estate

Licensed, bonded and insured: What does that all mean to the homeowner?

By From page C7 | February 15, 2013

Some customers often wonder how easy or difficult it is for a contractor to get their license. Actually, California is one of the most difficult places in the United States because of strict requirements. Any contractor applying for a license must put in the required experience of four years as a journeyman in the trade before taking their test. The test that all contractors need to pass covers both law and the trade. Once contractors pass they have to be fingerprinted and that information is run through the California Depart of Justice and FBI.

Now that the test is passed, the legalities come into play to keep the homeowner safe. Every contractor has to be bonded; however, it is actually illegal to advertise that you are bonded unless contractors are bonded for more than the state minimum. The state requires that each contractor be bonded for a minimum of $12,500. So when people  see trucks or advertising brochures from a licensed contractor that says they are licensed and bonded, they must be bonded for more than that amount.

The consumer can claim against the bond for violations of the Contractors License Law by a licensee. So if there is an unfortunate accident on the job or if a contractor does the demo part of the job, gets paid and never comes back to finish, the homeowner can make a claim against the company’s bond and can receive compensation. What is not required by law is general liability insurance, but an insightful contractor will indeed have it. This protects the homeowner and contractor in case the structure is damaged due to the work performed.

Another form or insurance is workers comp insurance. This is required for companies with employees. If a homeowner hires a contractor and he claims he is exempt from workers comp because he says he has no employees but shows up with employees to perform the work, then the customers know he is not properly insured. Even any subcontractor that the general contractor hires to perform work needs to have workers comp if they have employees. It is the responsibility of the general contractor to make sure everyone is properly insured. Homeowners can check this by going to the Contractors State License Board’s website. The dangerous part for the homeowner is if everyone isn’t properly insured and an employee gets injured while working on your property, the homeowner could be held liable for that employee’s injury.

So with all this in place, and the homeowner checking to make sure they are getting a quote from a licensed contractor, they can feel more comfortable with the decision. Always check the Contractors State License Board’s website for any questions:, or call and ask the contractor.

Jeff Nilluka is a licensed contractor No. 875781 and the owner of Cambrian Construction in the El Dorado County. He and his wife Jenelle can be reached by their website at or 916-458-1771.

Special to the Democrat

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