How Much Does a Contractor Bond Cost in Arizona?
Bonds over $4,250
Bonds over $6,750
Bonds up to $50,000
1-Year Bond Starts at $50.00
0.5% of the Bond Amount
Bonds over $50,000
Bonds up to $25,000
1-Year Bond Starts at $100.00
1% of the Bond Amount
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What Does a Contractor Bond Protect Against?
The contractor surety bond is furnished for the benefit of and subject to claims by the registrar of contractors for failure to pay any sum prescribed by Arizona Revised Statutes ARS section 32-1152. The bond is also for the benefit of claims by a licensee or a lessee, owner or co-owner of nonresidential real property, who has a direct contract with the licensee whose bond the claim is made and who is damaged by the failure of the licensee to build or improve a structure or other appurtenance on the real property at the time the work was performed in a manner complying with all applicable building or construction codes and in accordance with the standards of construction work approved by the state registrar.
The residential bond is for the benefit of and subject to claims by any person providing labor, materials or construction equipment on a rental basis used in the direct performance of a construction contract involving a residential structure or by persons injured as defined in ARS section 32-1131. In addition to the state contractor bonds, certain cities such as Phoenix, Tempe, and Prescott have local contractor license and permit bond requirements.
Getting Your Arizona Business License or Registration
Arizona contractors must file a Contractor's Bond in the amount required for the license classification and expected annual gross volume as outlined in the table above. The bond may be in the form of a surety bond or a cash bond. New applications for any license classification require the applicant to estimate his anticipated gross volume of work within the State of Arizona for the remainder of the present fiscal year.
The filing of a bond or deposit in a specified amount shall be deemed to be the equivalent of submitting a volume estimate within the dollar limitations applicable for such bond amount. The amount of the contractor's license bond may be increased at any time during the fiscal year. Additional information on licensing and bonding requirements can be found in the license application packet.
The following is a general overview of the contractor licensing requirements as mandated by the Arizona Registrar of Contractors:
- Identify a Qualifying Party who meets the license classification requirements for your license classification
- Qualifying Party must pass the required examinations including a business management exam (BME) and a specific trade exam
- The Applicant and Qualifying Party must submit to background checks as mandated by AZ ROC
- Form a Legal Entity or register your legal entity at the Arizona Corporation Commission
- Complete and Submit Project Verification and Experience Forms with application
- Obtain and submit a Surety Bond as outlined on this page
- Pay required state fees and assessments with your application
- Provide Government Issued Identification with your application
- Complete and mail or deliver application and related documentation to the Arizona Registrar of Contractors
Arizona Contractor License Classifications
The Arizona Registrar of Contractors (AZ ROC) issues separate contractor licenses for commercial and residential work. Dual licenses are also issued for contractors engaged in both commercial and residential work. AZ ROC defines residential contracting is as construction on residential structures such as houses, townhouses, condominiums or cooperative units and apartment complexes of four units or less, including any appurtenances on or within residential property lines, connection to utility service and sewer lines, meters and mechanical or structural service for any residential structure. Commercial contracting is anything other than residential contracting as defined above. Specific classifications are as follows:
RESIDENTIAL CONTRACTING
C-1 ACOUSTICAL SYSTEMS, C-3 AWNINGS, CANOPIES, CARPORTS AND PATIO COVERS, C-4 BOILERS, STEAMFITTING AND PROCESS PIPING, C-6 SWIMMING POOL SERVICE AND REPAIR, C-7 CARPENTRY, C-8 FLOOR COVERING, C-9 CONCRETE, C-10 DRYWALL, C-11 ELECTRICAL, C-12 ELEVATORS, C-14 FENCING, C-15 BLASTING, C-16 FIRE PROTECTION SYSTEMS, C-21 HARDSCAPING AND IRRIGATION SYSTEMS, C-24 ORNAMENTAL METALS, C-27 LIGHTWEIGHT PARTITIONS, C-31 MASONRY, C-34 PAINTING AND WALL COVERING, C-36 PLASTERING, C-37 PLUMBING, C-38 SIGNS, C-39 AIR CONDITIONING AND REFRIGERATION, C-40 INSULATION, C-41 SEPTIC TANKS AND SYSTEMS, C-42 ROOFING, C-45 SHEET METAL, C-48 CERAMIC, PLASTIC AND METAL TILE, C-49 COMMERCIAL, INDUSTRIAL REFRIGERATION, C-53 WATER WELL DRILLING, C-54 WATER CONDITIONING EQUIPMENT, C-56 WELDING, C-57 WRECKING, C-58 COMFORT HEATING, VENTILATING, EVAPORATIVE COOLING, C-60 FINISH CARPENTRY, C-61 CARPENTRY, REMODELING AND REPAIRS, C-63 APPLIANCES, C-65 GLAZING, C-67 LOW VOLTAGE COMMUNICATION SYSTEMS, C-70 REINFORCING BAR AND WIRE MESH, C-74 BOILERS, STEAMFITTING AND PROCESS PIPING, INCLUDING SOLAR, C-77 PLUMBING INCLUDING SOLAR, C-78 SOLAR PLUMBING LIQUID SYSTEMS ONLY, C-79 AIR CONDITIONING AND REFRIGERATION INCLUDING SOLAR
Other Helpful Information and Links
Arizona Registrar of Contractors
Arizona Revised Statutes Section 32-1152 Bonds
Contractor's license bonds are set in the following amounts based upon the gross volume of work contemplated by the licensee within the State of Arizona for the ensuing fiscal year:
| License Type | Contemplated Gross Volume (Per License) | Bond Amount |
|---|---|---|
| Residential General Contractors | Less than $750,000 | $9,000 |
| $750,000 or more | $15,000 | |
| Residential Specialty Contractors | Less than $375,000 | $4,250 |
| $375,000 or more | $7,500 | |
| Commercial General Contractors (Includes General Engineering Contractors) | $150,000 or less | $5,000 |
| In excess of $150,000 but not more than $500,000 | $15,000 | |
| In excess of $500,000 but not more than one million | $25,000 | |
| In excess of one million but not more than five million | $50,000 | |
| In excess of five million but not more than ten million | $75,000 | |
| Over ten million | $100,000 | |
| Commercial Specialty Contractors | $150,000 or less | $2,500 |
| In excess of $150,000 but not more than $500,000 | $7,000 | |
| In excess of $500,000 but not more than one million | $17,500 | |
| In excess of one million but not more than five million | $25,000 | |
| In excess of five million but not more than ten million | $37,500 | |
| Over ten million | $50,000 |
Dual license bond amounts are calculated by combining the amount required for residential and commercial.
Table above courtesy of the Arizona Registrar of Contractors.
Arizona Contractor License Bond Term
Arizona contractor license bonds are continuous. This means that there is no termination date on the bond. Premiums will need to be paid typically on an annual basis in order to keep the bond in force. The bonding company has the right to cancel the bond but must send a notice to you and the Arizona Registrar of Contractors thirty days prior to the cancellation date.
Increasing Your Arizona Contractor License Bond for Evolving Business Needs
The amount of the contractor's license bond may be increased at any time. However, a cash deposit in lieu of bond cannot be decreased except at the time of renewal for the ensuing fiscal license year.
Arizona Contractor License Bond Effective Date
Your bond becomes effective when filed with the Registrar's office. If the effective date shown on the bond is after the date of filing with the Registrar, then that date shown on the bond shall be the controlling date for when the bond becomes effective.