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Section A — Licensing Application Forms ~120 min

How to Get a $10,000 Surety Bond for Your California Home Care Agency

California requires all Home Care Organizations to carry a specific type of surety bond called an Employee Dishonesty Bond. This protects your clients in the rare event that a caregiver steals from them. You must purchase a bond of at least $10,000, and your insurance broker must sign and notarize the HCS 402 form to prove you have it.

How the Employee Dishonesty Bond Works

Unlike regular liability insurance (which protects your business from lawsuits), a surety bond protects the state and your clients from your business.

The Three Parties Involved:

1. The Principal: That is YOU (your Home Care Organization). You buy the bond.

2. The Obligee: That is the State of California (CDSS). They require the bond.

3. The Surety: That is the insurance company. They issue the bond and guarantee payment if a valid claim is made.

The $10,000 Minimum

The state requires a bond amount of at least $10,000. For a brand new agency, a $10,000 bond is perfectly fine and will usually only cost you around $100 to $250 per year depending on your personal credit score.

Who Fills Out the HCS 402?

You will fill out your business name at the top, but the Surety Company has to fill out the bond details, sign it, and attach a formal "Power of Attorney" and a Notary Acknowledgment. You cannot just type "I bought a bond" on this form — it requires the insurance company's official sign-off.

Where to Get Your Bond

You have a few options. The process is straightforward — most bonds are approved in 1-3 business days.

Option 1: Online Surety Bond Companies (Fastest)

These companies specialize in surety bonds and can issue yours online in minutes. They handle the HCS 402 paperwork for you.

SuretyBonds.com

The largest online bond marketplace. Search "California Home Care Organization Bond" or "Employee Dishonesty Bond."

- Apply online in 5 minutes

- Instant approval for most applicants

- They mail the completed HCS 402 with notarized Power of Attorney

- suretybonds.com

JW Surety Bonds

Another major online provider with competitive rates.

- Free quotes, no obligation

- Handles the HCS 402 form completion

- jwsuretybonds.com

Zander Insurance

Offers fidelity/dishonesty bonds and is known for good customer service.

- zanderins.com

Option 2: Your Existing Insurance Broker

If you already work with a commercial insurance agent (or plan to for your General Liability and Workers Comp), ask them to add the surety bond. Many brokers can bundle this with your other business insurance.

What to say: "I need a $10,000 Employee Dishonesty Bond for a California Home Care Organization license. The surety company needs to complete the HCS 402 state form, sign it, notarize it, and attach a Power of Attorney."

Option 3: Local Insurance Agents

Search "surety bond [your city]" and call a few local agents. Independent agents often have access to multiple surety companies and can find competitive rates.

What the Process Looks Like

Here is exactly what happens from start to finish:

Step 1: Apply (5-10 minutes)

Fill out a short application with the bond company. They need your business name (must match your LLC filing exactly), your EIN, and your personal information for a soft credit check.

Step 2: Get Approved (instant to 3 days)

Most new agency owners with decent personal credit (640+) get approved instantly for a $10,000 bond. If your credit is lower, you may still qualify but at a higher premium.

Step 3: Pay the Premium (your annual cost)

You pay your annual premium — typically $100-$250 for a $10,000 bond. This is NOT the bond amount. You pay a small percentage of the bond amount each year.

Step 4: Receive the Bond Package (1-5 business days)

The surety company mails you:

- The completed HCS 402 form with the surety's signature and seal

- A Power of Attorney from the surety company

- A Notary Acknowledgment page

- Your Bond Certificate

Step 5: Sign Your Part (2 minutes)

You sign the "Principal" section of the HCS 402. Do NOT sign the surety section — that is the insurance company's signature.

Step 6: Upload and Save

Upload a scan of the completed HCS 402 here. Keep the original — you will mail it to CDSS with your application packet.

Total Cost Breakdown

| Item | Cost | Who Pays |

|------|------|----------|

| Annual bond premium | $100-$250/year | You pay the surety company |

| One-time application fee | $0-$50 | Some companies charge, most do not |

| Your total first-year cost | $100-$300 | |

The premium renews annually. If you cancel your agency or let the bond lapse, CDSS will suspend your license.

Important: Name Matching

The business name on your bond must exactly match the name on your HCS 200 application and your Secretary of State filing. If your LLC is "Sunrise Care, LLC" (with a comma), the bond must say "Sunrise Care, LLC" — not "Sunrise Care LLC" or "Sunrise Care."

When you apply for the bond, copy-paste your canonical business name from Step 1. Do not retype it.

Common Mistakes to Avoid

  • 1Buying standard "General Liability" insurance and thinking it covers this requirement. It does not. You specifically need an "Employee Dishonesty Bond" or "Fidelity Bond."
  • 2Failing to have the Surety company attach their Notary Acknowledgment and Power of Attorney to the back of the HCS 402 form.
  • 3Having a mismatch between the business name on the bond and the business name on your HCS 200. "Acme Care" and "Acme Care LLC" are legally different—the bond must perfectly match your state application.

Tips

  • Online surety bond companies (SuretyBonds.com, JW Surety) are usually faster and cheaper than going through a traditional insurance broker.
  • Apply for the bond as soon as your LLC is approved. You need the completed HCS 402 before you can mail your application packet.
  • Keep the original bond documents in a safe place. CDSS requires the original "wet signature" copy of the HCS 402 — a photocopy is not accepted.
  • If your personal credit score is below 640, you may still qualify but expect a higher premium ($200-$400/year instead of $100-$250).

What You Need to Do

  1. 1
    Contact a commercial insurance broker to request a $10,000 Employee Dishonesty Bond
  2. 2
    Provide the broker with the blank HCS 402 form for the Surety to complete and notarize
  3. 3
    Review the completed bond for name/address accuracy
  4. 4
    Sign the "Principal" section of the completed HCS 402
  5. 5
    Input your final bond details into the data fields above for your records

Information You Will Need

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

Principal (Your Legal Business Name)

Must exactly match your entity name on the HCS 200.

Required
Name of Surety (Insurance Company)

The name of the company actually issuing the bond (your broker will tell you this).

Required
Bond Number

The official tracking number assigned by the Surety.

Required
Bond Amount ($)

CDSS requires a minimum of $10,000. Most new agencies use exactly $10,000.

Required
Effective Date of Bond

The date your bond coverage officially begins.

Required
Name of Principal Signer

Your name (as the owner/officer buying the bond).

Required
Title of Principal Signer
Required

Documents Needed

  • HCS 402 — Surety Bond (completed and notarized)
    RequiredPDF · Max 10MB

Official Resources

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John Helmy

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John Helmy, Founder of HomeCareAtlas

Building tools and resources to help home care agency owners navigate licensing, compliance, and growth.