Fraud bond

Definition

The ten thousand dollar bond behind a driving school, and what it does not cover.

Why It Matters

The condition matters more than the amount. California requires a school owner to file a bond conditioned that the applicant will not practice any fraud or make any fraudulent representation causing a student a monetary loss. It answers for a cheat, not for lessons a solvent school simply stopped delivering, so prepaid packages sit behind nothing. Neither license survives a sale: the school owner's license is automatically cancelled when the person designated as licensee changes or the bond lapses, the owner must notify the state within ten days of any ownership change, and each instructor holds a separate personal license that is theirs and not the school's.