Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your Arizona contractor license bond needs. Learn how to get a contractor’s license in Arizona, below.
What Contractor Licenses Are Issued in Arizona?
In Arizona, contractors are licensed by the Arizona Registrar of Contractors (AZROC). For every specific building trade of the construction field, AZROC issues separate commercial and residential licenses and a dual license that permits both residential and commercial work. There are 40 different residential specialty license classifications alone.
What Are the Steps in the Licensing Process?
While the specific steps in the licensing process differ depending on the license classification, in general, getting licensed by AZROC involves:
- Meeting examination and experience requirements
- Passing a background check
- Registering your business with the state
- Purchasing an Arizona contractor license bond
- Paying the required fees and assessments
- Providing proof of your identity
- Completing and submitting the appropriate license application form
- Submitting the completed application and all supporting documents to AZROC
Why Is a Contractor License Bond Required?
There are some very good reasons for the Arizona contractor license bond requirement:
- It indemnifies AZROC and the state of Arizona against liability for damages caused by the unlawful or unethical actions of an AZROC-licensed contractor.
- The bond serves as the contractor’s pledge to operate in compliance with the laws governing Arizona’s construction industry.
- The bond also guarantees funds to compensate the injured party if a violation does occur.
The required bond amount established by the state of Arizona (the bond’s “obligee”) varies by license classification and volume of business and ranges from $2,500 to $100,000. For a dual license, the required bond amounts for a residential and a commercial bond in that classification are added together.
An Arizona contractor license bond must be continuous, meaning that it must be renewed as necessary to maintain an active bond in force at all times to avoid license suspension or revocation.
How Are Contractor License Bond Claims Paid?
The terms of an Arizona contractor license bond legally obligate the contractor (the bond’s “principal”) to pay all valid claims. However, if the contractor doesn’t pay a claim promptly, the bonding company (the “surety”), will pay it and then collect reimbursement from the principal.
How Much Does an Arizona Contractor License Bond Cost?
The premium you will pay for an Arizona contractor bond is a small percentage of the required bond amount. The surety will assign a premium rate that reflects the underwriters’ assessment of your creditworthiness and ability to repay any claims the surety pays on your behalf. The primary factor is your personal credit score.
If your credit is good, your premium rate should be in the range of 1% to 3%. If you have some credit issues, your premium rate may be higher.
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Our surety bond professionals will get you the Arizona contractor license bond you need at a competitive rate.
