What happens to a responsible contractor's license when a claim is paid from the Residential Contractor's Recovery Fund?

When a claim is paid from the Residential Contractor's Recovery Fund, the responsible contractor's license is suspended. This suspension serves as a regulatory measure to protect consumers and ensure that contractors address the reasons for the claim being filed against them. The contractor must typically fulfill certain obligations or conditions to restore their license, such as repaying the amount paid out from the fund or resolving any outstanding issues related to the claim.

This process is important to maintain accountability within the contracting industry and reinforces the standards that contractors are expected to uphold. The other options do not adequately reflect the typical consequence for a contractor's license in this situation, as suspension allows for the potential for reinstatement once the necessary criteria are met.