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Arizona Contractor License FAQs - License Bond Requirements Arizona Contractor License Bond Requirements
Are there any bond requirements for a contractor's license? Yes. It is your responsibility to file a Contractor's Bond in the amount required for your license classification, and
anticipated annual gross volume. The bond may be in the form of a surety bond or a cash bond. Additional information on bonding requirements is provided in the license application packet.
Residential contractors are also required to provide a consumer protection bond. This may be in the form of a Surety Bond or cash deposit in the amount of $100,000.00, or payment into the
Contractor's Recovery Fund. The application instructions provide detailed information on this requirement. Where can I get a bond? You may obtain a Surety Bond from your insurance agent
or from another insurance company which is authorized by the Arizona Department of Insurance to operate in Arizona and issue contractors license bonds. Surety bonds require an Arizona resident
insurance agent's complete address and signature. You may also provide a bond in the form of cash or a certificate of deposit from any bank which operates in Arizona. Contact any Arizona Registrar of Contractors office to obtain an alternative to
cash assignment form if you wish to use a certificate of deposit for your license bond. How long is a bond valid? The surety bond must be continuous. This means that there is no
termination date on the bond. You may be required to pay premiums to the insurance company periodically 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. You will have to replace the bond or your license will be suspended.
If your bond is in cash, the agency will retain the bond until two years after the license terminates. If no claims are made against the bond in that time, you may apply to have the bond released to
you.
Bond Limits and Regulations
Contractor's license bonds are established in the following amounts as 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 |
$150,000 or less |
$5,000 |
|
In Excess of $150,000 but not more than $750,000 |
$9,000 |
|
Over $750,000 |
$15,000 |
Residential Specialty Contractors |
$100,000 or less |
$1,000 |
|
In excess of$100,000 but not more than $375,000 |
$4,250 |
|
Over $375,000 |
$7,500 |
Commercial General Contractors |
$150,000 or less |
$5,000 |
|
In excess of $150,000 but not more than $500,000 |
$10,000 |
|
In excess of $500,000 but not more than one million |
$15,000 |
|
In excess of one million but not more than five million |
$40,000 |
|
In excess of five million but not more than ten million |
$65,000 |
|
Over ten million |
$90,000 |
Commercial Specialty Contractors |
$150,000 or less |
$2,500 |
|
In excess of $150,000 but not more than $500,000 |
$5,000 |
|
In excess of $500,000 but not more than one million |
$10,000 |
|
In excess of one million but not more than five million |
$20,000 |
|
In excess of five million but not more than ten million |
$32,500 |
|
Over ten million |
$45,000 |
Dual license bond amounts are calculated by
combining the amount required for residential and commercial.
New Applications
On all new applications for any classification of license, the applicant shall estimate his anticipated gross volume of work within the State of Arizona for the remainder of the present fiscal
year and shall be governed by the bond requirements herein before set forth as they apply to his particular classification of license. 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.
Renewal
All estimates made for renewal of licenses shall be made in such manner and upon a form acceptable to the Registrar of Contractors. The filing or continuation 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 Registrar of Contractors is not responsible for over or
under estimates of volume of work made by the licensee or for the sufficiency of any bond or deposit. A gross underestimate knowingly made by a licensee may be construed as a material
misrepresentation and could subject the licensee to suspension or revocation of his license.
Increasing the Amount
The amount of the contractor's license bond may be increased at any time during the fiscal year. However, a surety bond or cash deposit in lieu of bond cannot be decreased except at the time of
renewal for the ensuing fiscal year.
Effective Upon Filing
Surety bonds or cash deposits shall not become effective until filed with the Registrar's office and if the effective date as shown upon the bond is after the date of filing with the Registrar,
then the effective date shown upon the bond shall be the controlling date on which the bond becomes effective.
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