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Section A — Licensing Application Forms ~120 min

How to Get the $10,000 Employee Dishonesty Bond for Your California Home Care Agency

California requires an employee dishonesty bond. It must include third-party coverage and be at least $10,000 (HSC §1796.37(a)(4)). It helps clients if a worker steals from them. The bond company signs the HCS 402.

How the bond works

A bond is not the same as liability insurance. It pays clients who are hurt by theft or fraud by you or your workers (HCS 402).

Who is involved:

1. The Principal: Your agency. You buy the bond.

2. The Surety: The bond company. It pays valid claims.

3. The State of California: Named as the beneficiary (HCS 281 A5).

What CDSS needs (HCS 281 A5)

  • A bond of at least $10,000, with third-party coverage (HSC §1796.37(a)(4)).
  • The HCS 402, signed by an agent of the bond company.
  • The "Principal Signature" line signed by you, the applicant.
  • A copy of the bond certificate.
  • The Acknowledgment and Power of Attorney forms from the bond company.
  • The State of California named as beneficiary.
  • An effective date and an expiration date.
Signatures: Original signatures, or photocopies of original signatures. Electronic signatures are not accepted for this form (HCS 281 A5).

Where to get a bond

Ask a commercial insurance broker, or a surety bond company. Many sell this kind of bond.

What to say: "I need a $10,000 employee dishonesty bond with third-party coverage. It is for a California Home Care Organization license. The surety must sign the CDSS HCS 402 form."

Ask if they will fill out the HCS 402 for you. Give them the blank form if they don't have it.

What to expect

1. Apply. Give your exact business name. The bond company may check your credit.

2. Pay the premium. This is a yearly fee, not the bond amount. Prices vary. Many small agencies pay about $100 to $300 a year (our estimate).

3. Get your papers. The HCS 402, the bond certificate, the Acknowledgment, and the Power of Attorney.

4. Sign the Principal line. Do not sign the surety's lines.

5. Upload a scan here. Put the signed papers in your mail packet.

Keep the bond in force

You must keep the bond while you are licensed (HSC §1796.42(c)). CDSS may deny, suspend, or revoke a license for breaking these rules (HSC §1796.38).

Use the same name

Use your exact legal name on the bond. Copy and paste it from Step 1.

Common Mistakes to Avoid

  • 1Buying general liability insurance and thinking it covers this. You need an employee dishonesty bond.
  • 2Getting a bond without third-party coverage. The law requires it (HSC §1796.37(a)(4)).
  • 3Leaving out the bond certificate, Acknowledgment, or Power of Attorney.
  • 4Signing the HCS 402 with an e-signature. CDSS will not accept one for this form.
  • 5A name on the bond that does not match your HCS 200.

Tips

  • Get a few quotes. Prices vary.
  • Apply once your LLC is approved. You need the HCS 402 before you mail your packet.
  • Check that the bond shows both an effective date and an expiration date.

What You Need to Do

  1. 1
    Contact a commercial insurance broker to request a $10,000 Employee Dishonesty Bond

    Ask for third-party coverage (HSC §1796.37(a)(4)).

  2. 2
    Give the surety the blank HCS 402 to complete and signOpen resource
  3. 3
    Review the completed bond for name/address accuracy
  4. 4
    Sign the "Principal" section of the completed HCS 402

    Original signature or a photocopy of it. No e-signatures.

  5. 5
    Input your final bond details into the data fields above for your records
  6. 6
    Get the bond certificate, Acknowledgment, and Power of Attorney to send with the HCS 402

    HCS 281 A5. Upload the bond certificate in the Insurance & Bond step.

Information You Will Need

Have these details ready before you sit down to fill this out:

Principal (Your Legal Business Name)
Required
Surety Company
Required
Bond Number
Required
Bond Amount ($)

At least $10,000, with third-party coverage (HSC §1796.37(a)(4)).

Required
Bond Effective Date
Required
Bond Expiration Date
Required
Name of Principal Signer
Required
Title of Principal Signer
Required

Documents Needed

  • HCS 402 — Dishonesty Bond form (signed by the surety and by you)
    RequiredPDF · Max 10MB

Official Resources

Want us to handle this for you?

Our licensing team knows this form inside and out. We fill out every form, check every box, and submit the whole packet to CDSS on your behalf. You just answer a few simple questions.

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