What is the California Contractor Business Examination Like? What You Need to Know

What is the California Contractor Business Examination Like? What You Need to Know

April 16, 2019

What is the California Contractor Business Examination Like? What You Need to Know

If you’re a contractor in California, you probably already know that you must take a trade exam before you receive your contracting license. But did you know that the California contractor’s exam also includes a section on business law and practices? Before you go into your exam, make sure you’re prepared to tackle the business section as well as the section on specifics of your trade.

When you receive your Notice to Appear from the CSLB, you’ll also receive a study guide to help you prepare for the law and business section of the licensure exam. The exam contains questions on state-required safety practices, OSHA regulations, and bond/insurance requirements for contractors. The exam also features a number of questions on general business practices, including cash management, budgeting, reporting taxes, and employee payroll management. The estimated breakdown of the business portion of the exam is as follows:

  • Business Organization: 10%
  • Business Financial: 15%
  • Employment Requirements: 12%
  • Bonds, Insurance & Liens: 10%
  • Contract Requirements and Execution: 23%
  • Licensing Requirements: 8%
  • Safety Requirements: 15%
  • Public Works: 7%

The California state contractor’s exam is multiple choice, and there’s no penalty for guessing. If you’re not sure of an answer, don’t be afraid to narrow down your choices as best you can and then make an educated guess. Avoid bringing any study materials to the exam; the test is closed-book, and cheating may lead to an immediate failing grade. If you fail the test, don’t worry—you’ll have multiple opportunities to take it again.

Remember that passing the contractor’s exam isn’t the final step to becoming a licensed contractor—you must also carry workers’ compensation insurance and a contractor’s bond of at least $15,000. Not sure how to get licensed? Let DJM Insurance Services help you out! At DJM Insurance Services, we provide a wide range of state-required and additional protections for contractors. Give us a call today at 800-763-0698 to learn more and get started!