Arizona has two main categories of contractor license bonds (CLBs): commercial and residential. Like many states, the cost of a majority of the Arizona CLBs depends on your credit. This means the premium—what you pay—for your bond will be a percentage of the bond amount. That percentage is the premium rate, which is determined by your credit. The premium rate for standard credit starts around 1-3%, while bad credit may start around 6% or higher.
The bond amount varies based on the license classification and the contractor’s contemplated volume of work. Consequently, creating a broad range of prices for these bonds. The Arizona Registrar of Contractors has a chart that helps determine your required bond amount.
Say a Residential General Contractor has more than $750,000 in annual gross volume of work. In this case, they will need a bond amount of $15,000. With a 1% premium rate, they can expect to pay $150 for their bond. Fortunately, we offer free quotes for all bonds.
The Arizona Registrar of Contractors requires contractors to get a surety bond to protect the public from damages incurred by the contractor’s violation of licensing laws or unsatisfactory work. Obtaining a surety bond is a requirement contractors must fulfill before earning an active license.
The state of Arizona divides contractor bonds into four categories, listed below:
Arizona has a wide variety of license classifications. Despite there being only four categories listed above. Some contractors may have a dual license for residential and commercial work. If so, calculate the bond amount by combining the amount required for both license types.
Typically, when labor and materials exceed $1,000 or if a permit is required, you must have a license. While almost all contractors need a license, there are some exemptions. Below we’ve outlined what you can expect from the licensing process.
This is only a brief description of the steps required to obtain a license. Arizona’s Registrar of Contractors provides further information.