How to Get a Contractor’s License in Arkansas

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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 Arkansas contractor license bond needs. Learn how to get a contractor’s license in Arkansas, below.

What Contractor Licenses Are Issued in Arkansas?

Arkansas contractor licenses are categorized as either residential or commercial, defined as below:

  • Residential contractor’s license. This is required for projects valued at more than $2,000 (including labor, materials, and other costs) on any single-family residence (which actually can contain up to four separate residential units).
  • Commercial contractor’s license. This is required for projects valued at $50,000 or more (including labor, materials, and other costs) on any structure not considered a single-family residence.

There are also three other specialty licenses:

  • A restricted commercial license for projects valued at less than $750,000.
  • A light building commercial license for projects valued at less than $500,000 involving commercial buildings no more than two stories tall.
  • A home improvement license for residential remodeling or repair projects valued at more than $2,000 (not required if you own the home or are already licensed as another type of contractor).

What Are the Steps in the Licensing Process?

While there are some differences depending on the specific license type, in general, the licensing process involves submitting the following to the Arkansas Contractors Licensing Board:

  • Your completed Arkansas New Application form, either Commercial or Residential Builder
  • Payment for the application fee (currently $100)
  • Three written references
  • A copy of your passing score on the Arkansas Business and Law exam
  • Financial documentation (financial statements for a commercial license and a balance sheet for a residential license)

Applicants for a commercial contractor’s license must also provide a $10,000 Arkansas contractor’s license bond.

Why is a Contractor License Bond Required?

An Arkansas contractor’s license bond serves multiple purposes:

  • It’s the commercial contractor’s guarantee to operate in compliance with all applicable Arkansas laws.
  • It indemnifies the state of Arkansas against financial liability for damages incurred by a client due to the actions of a state-licensed commercial contractor.
  • It ensures that funds will be available to compensate an injured party for such damages.

To avoid license suspension or revocation, an Arkansas commercial contractor must maintain a valid license bond at all times.

How Are Arkansas Contractor License Bond Claims Paid?

An Arkansas contractor’s license bond is a legally binding contract between three parties known as the bond’s obligee, principal, and surety:

  • The obligee requiring the bond is the Arkansas Contractors Licensing Board.
  • The principal required to purchase the bond is the commercial contractor.
  • The surety is the company underwriting and authorizing the bond.

The surety bond agreement obligates the principal to pay all valid claims. However, in practice, the surety will often step in and pay the claim and then collect reimbursement from the principal.

How Much Does an Arkansas Contractor License Bond Cost?

While the obligee establishes a bond’s penal sum, the surety sets the premium rate based on the underwriters’ assessment of the principal’s creditworthiness.

If your personal credit score is good, the surety has little reason to be concerned about being repaid for the debt created by paying a claim on behalf of the principal. Consequently, your premium rate should be in the range of 1-3% of the $10,000 required bond amount, which may make your premium as low as $100 per year.

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Our surety bond professionals will get you the Arkansas contractor license bond you need at a competitive rate.