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Arizona Contractor License Bonds
The State of Arizona requires contractors to be licensed and carry an Arizona Contractor License Bond. The Arizona Registrar of Contractors (AZ ROC) oversees contractors and verifies that the bond is in place.
Jet is a direct surety provider and exclusively offers affordable monthly rates to Arizona contractors. If you are looking to procure or maintain a contractor license, the Jet team can help you secure the required Contractor License Bond!
Apply for your bond in minutes!
A contractor’s license classification and gross volume will determine how much of a surety bond is required. Also, each license held by a contractor will have its own individual bond attached to it. Many contractors hold multiple license bonds simultaneously.
Jet Insurance Company provides Arizona Contractor License Bonds to act as a financial guarantee for the sake of Arizona consumers and the AZ ROC in cases of the contractor committing incomplete or faulty work, breach of contract, or non-payment of licensing fees or other commitments.
What Is the Price of an Arizona Contractor License Bond?
Contractors can pay as low as $5 monthly or $50 annually for their bond. 2-year and 3-year bond terms are also available with Jet if you're looking to save some cash in the long run. Prices are based on the bond limit, work performed, and a personal credit check of the contractor.
Jet has eliminated unnecessary middlemen brokers and agents along with their fees and commissions thus giving us the ability to offer lower bond rates to contractors.
Jet’s preferred prices are reflected below for residential contractors who perform construction services on residential structures such as houses, townhouses, condominiums, or any building within a residential property line. Please note not all possible limits are shown.
| Bond Limit | Monthly | Annual |
|---|---|---|
| $4,250 | $5 | $50 |
| $7,500 | $8 | $75 |
| $9,000 | $9 | $90 |
| $15,000 | $11 | $113 |
The chart below is for commercial contractors approved at the preferred rates. Contractors with substandard credit will still receive competitive rates available to purchase online. Please note not all possible limits are shown.
| Bond Limit | Monthly | Annual |
|---|---|---|
| $5,000 | $5 | $50 |
| $15,000 | $9 | $90 |
| $25,000 | $15 | $150 |
| $50,000 | $30 | $300 |
| $100,000 | $60 | $600 |
For individuals who perform both residential and commercial construction, dual licenses are required by the Registrar of Contractors. The contractor bond limits for dual licensed contractors are calculated by adding the amount of each residential and commercial bond. Dual Contractor License Bond prices are still only a small percentage of the bond limit. Please note not all bond limits are shown.
| Bond Limit | Monthly | Annual |
|---|---|---|
| $6,750 | $6 | $63 |
| $14,000 | $13 | $130 |
| $32,500 | $30 | $301 |
| $90,000 | $83 | $833 |
Choosing Jet gives you the advantage of paying for your bond on a monthly basis or annually online in moments. However, for larger bond limits over $50,000, Jet may need to review additional information such as the contractor’s business experience and financial statements before a bond can be approved and lower prices offered.
What Is the Purpose of the Arizona Contractor License Bond?
A Contractor License Bond’s main purpose is to act as a form of financial protection for subcontractors, residential or commercial clients, suppliers, and the Arizona Registrar of Contractors should the contractor cause damages to such parties. The bond ensures that an individual can seek restitution, through the license bond, if the contractor refuses or is unable to reimburse the claimant for damages that the contractor is at fault for.
The AZ ROC was established in 1931 as a regulatory agency with the purpose of enforcing state contractor laws in order to protect local residents and businesses from the construction industry. The Registrar’s objective is to build a safe and responsible market economy of reputable contractors for the Arizona construction industry.
The licensing requirements are a mechanism to protect the welfare of the public and promote quality construction work. The Contractor License Bond is an additional tool used by the AZ ROC to receive a third-party guarantee, in this case from Jet Insurance Company, that the contractor is financially responsible enough to engage in business within the state. Without that promise from Jet, you wouldn’t be allowed to be licensed by the state. With Jet as your surety partner, license bonding is a quick and easy item to address in a sea of red tape.
How Does the Application Process Work With Jet?
Our bond application process is quick! The Arizona Contractor Bond can be purchased online or over the phone in just minutes. Jet will require you to confirm some general company information and provide the contractor’s social security number. Jet's team does base bond rates (as all surety companies do) on a personal credit check, which takes seconds and will not affect your credit score.
For commercial and dual contractors with larger bonding limits (over $50,000), a quick manual review of your application may be required by one of our underwriters.
Once payment is made for our monthly, annual, or multi-year option, a copy of the bond and receipt will immediately be sent to you for your personal records.
How Are Contractor License Bonds Filed in Arizona?
Jet will take care of the signing, sealing, and notarization of the Contractor License Bond form for you and at no extra cost!
According to state legislation, the original bond must be submitted to the Arizona Registrar of Contractors along with your signature. The bond must then stay on file for the remainder of the contractor offering services in line with that license classification. Failure to do so will result in the revocation of the contractor’s license.
The original bond form should be mailed to the following address:
Arizona Registrar of Contractors
P.O. Box 6688
Phoenix, AZ 85005-6748
For details regarding contractor license requirements and additional forms needed, further information can be found on the Registrar of Contractors' Applying for a License page.
New license applications are submitted to the following mailing address:
Arizona Registrar of Contractors
PO Box 6748
Phoenix, AZ 85005-6748
Or, they can be handed off in person at:
1700 W. Washington St.m Suite 105
Phoenix, AZ 85007-2812.
Can Contractor License Bonds Be Cancelled? Are Refunds Available?
With Jet, you can cancel the bond at any time! Contractor Bonds are continuous until canceled by the surety company so cancellation will need to be requested by Jet to the Arizona Registrar of Contractors. Once our team sends a written cancellation notice to the AZ ROC, your and Jet's liability attached to the bond will be released within 30 days of the notification receipt.
If you are paying monthly, there is generally no refund available. For annual or multi-year payment options, we will determine if there is any unused premium available to refund to you and send a check following the 30-day cancellation period.
Arizona Contractor Bond Renewal Process
With Jet’s monthly payment option, the obligation to renew your contractor’s bond is not needed! Payments will continue to come out of your preferred account automatically until cancellation is requested.
For contractors who paid in full, Jet will send you a renewal invoice prior to the bond term’s expiration date. No additional paperwork or extra renewal fees are required, payment is all that is needed. We will take care of the rest!
How Can Contractors Avoid a Claim on Their Bond?
Licensed contractors are expected to follow the Arizona Registrar of Contractors' regulations and state laws pursuant to Arizona Revised Statutes Title 32, Chapter 10. The statutes are extensive and should be reviewed thoroughly by all individuals looking to be a licensed contractor. Failure to follow contractor law in Arizona may lead to severe penalties.
Should a complaint be filed against a contractor, the Registrar of Contractors will schedule a hearing with the contractor to discuss details of the violation and what, if any, further action needs to be taken. This can be corrective action for the benefit of the damaged party, monetary fines, suspension of the contractor's license, the indefinite revocation of the contractor's license, a citation, civil penalties, large fees, and/or a bond claim. Below are common examples of prohibited acts that could facilitate disciplinary action, if uncorrected, that may include a bond claim:
- Abandonment of a construction project or refusal to perform/complete work without a legally valid excuse
- Non-payment of wages to subcontractors or employed laborers
- Committing a breach of contract
- Non-payment to vendors or suppliers for materials used in a construction project
- Committing negligent or improper construction work
- Performing work that has caused damage to the property under construction or has caused loss or injury.
- Failing to take appropriate corrective action to damages that were committed during a construction project
A claim against an Arizona Contractor Bond may not be immediately pursued. Most often the complainant will go through the AZ ROC’s complaint and investigation process before action can be taken against the surety bond. In the event that the contractor and claimant cannot resolve the complaint through the State’s mediation process, the case will be referred to the AZ ROC’s legal department.
Once reviewed, the AZ ROC will send the contractor an official citation with a final opportunity to respond and resolve the dispute before a formal legal hearing is scheduled; the contractor has 10 days to respond, and failure to do so will lead to further disciplinary action upon the contractor's license.
The AZ ROC may schedule a hearing with the Office of Administrative Hearings that must be attended by all parties involved. Following the hearing, the Administrative Law Judge has 20 days to notify the AZ ROC of their recommendation. The AZ ROC then has 30 days to consider and/or modify the judge's decision and will issue a final order to the contractor. This final order can result in a variety of disciplinary actions including a claim on the contractor's surety bond.
The AZ ROC will also allow claimants to take separate civil action against the contractor (this action can be taken simultaneously during the AZ ROC’s legal proceedings). If civil action is validated by an Arizona state judge, the bond can also be used to cover the claimant's financial damages as well as a reasonable attorney's fee fixed by the court.
Further prohibited acts and timelines in which action may be taken can be found listed in Arizona Revised Statutes 32-1154. Claims cannot be filed on the contractor’s license bond beyond two years following the date of the commission for the construction project, the delivery of materials, or the services provided upon which the violation complaint is based.
What Happens if I Get a Bond Claim?
Immediately contact Jet upon receipt of a claim notice! Our team will brief you on how our investigation and claim process works and then will proceed with a thorough review and analysis of the claim details, any supporting documentation, and the AZ ROC’s complaint/legal proceedings (see above). If the claim notification was sent from a state court, the same review and investigation process will commence by the Jet team.
For claims that are valid, Jet will make payment up to the bond limit. Surety license bonds are like letters of credit that can demonstrate to the Registrar of Contractors that it is economically safe to license a contractor. The bond protects the AZ ROC and the public from the contractor. Unlike insurance, the contractor is ultimately responsible for their actions and must reimburse Jet for claim payouts. Failure to do so will lead to cancellation of the Arizona Contractor License Bond and difficulty obtaining a bond in the future.
A contractor's license is automatically suspended if a claim payment is made from their bond, the license will not qualify for reactivation with the AZ ROC until the full bond amount is replaced
How Do I Determine My License Bond Limit?
According to Arizona Revised Statutes 32-1152, license bond limits for contractors are based on the license classification and the estimated gross volume of construction projects being performed. Refer to the charts below to determine which bond limit will be required of you.
Dual license bond amounts are calculated by adding the total amounts of bond limits needed for the residential and commercial work performed by the contractor. For example, if the contractor is doing $500k residential general and $500k commercial general work they would need a $14,000 bond ($9,000 + $5,000).
| Gross Volume | Bond Limit |
|---|---|
| $750,000 | $9,000 |
| $750,000 | $15,000 |
| Gross Volume | Bond Limit |
|---|---|
| $375,000 and less | $4,250 |
| $375,001 and higher | $7,500 |
| Gross Volume | Bond Limit |
|---|---|
| $150,000 and less | $5,000 |
| $150,001 to 500,000 | $15,000 |
| $500,000 to 1,000,000 | $25,000 |
| $1,000,001 to $5,000,001 | $50,000 |
| $5,000,001 to $10,000,000 | $75,000 |
| $10,000,001 and higher | $100,000 |
| Gross Volume | Bond Limit |
|---|---|
| $150,000 and less | $2,500 |
| $150,001 to 500,000 | $7,000 |
| $500,001 to 1,000,000 | $17,500 |
| $1,000,001 to 5,000,001 | $25,000 |
| $5,000,001 to $10,000,000 | $37,500 |
| $10,000,001 and higher | $50,000 |
Are Contractors Required to Obtain Any Additional Bonds?
If a contractor maintains more than one license then, they will need an additional license bond. So, if a contractor has a CR-11 to do electrical work and a CR-8 to do flooring, then they will have two licenses and need a bond for each license.
Contractors may also be required to obtain additional surety bonds based on the types of construction projects they are performing. Such secondary bonds and details regarding them can be found below.
Bid Bond- required to bid on certain public and private projects
Performance Bond- required to perform certain public and private projects
Arizona Contractor Taxpayer Bond
Right of Way Bond - Phoenix
Right of Way Bond - Maricopa County
Tucson Temporary Certificate of Occupancy Performance Bond
Tucson Temporary Use Permit Performance Bond
Recovery Fund
According to Arizona Revised Statutes 32-1132, residential general and dual general licensed contractors are required by the AZ ROC to either acquire a secondary surety bond in the amount of $200,000 or pay an assessment fee to the Residential Recovery Fund.
The Residential Recovery Fund is established by the AZ ROC and acts as an additional form of financial protection for residential homeowners. The fund is solely used for further reimbursement of damages suffered by claimants who have already received restitution via the contractor's license bond. More information about the Recovery Fund can be found on the AZ ROC’s “Recovery Fund” page.
What Other Forms of Insurance Are Required of Arizona Contractors?
Pursuant to Arizona Revised Statutes 32-1122, if applicable, the contractor is required by law to secure workers' compensation insurance. Workers' comp provides benefits to employees such as disability coverage, medical treatments, and the reimbursement of wages lost in cases of the employee obtaining an injury or illness on the job. Applicable contractors must provide their workers' compensation insurance policy number or provide proof of self-insurance when submitting their contractor license application. Contractor licenses will not be granted until this requirement has been fulfilled.
While not required for licensure, contractors may need to obtain general liability to get onto certain jobs. Whether or not a job requires it, contractors should purchase general liability to protect from lawsuits arising from damages contractors may cause to people and their property. One of those lawsuits can lead to financial ruin.
Who Is Exempt From a Contractor License in Arizona?
According to Arizona Revised Statutes 32-1121 & 32-1121; Version 2, exclusions from the contractor license and bond requirement include utility workers, architects, specialty engineers, gardeners, and owners of property who work to improve their property. Handymen who conduct work under $1,000 per job are also not required to be licensed by the AZ ROC, therefore they are exempt from the bonding regulation.
Who Needs the Arizona Contractor License?
The charts below identify the AZ ROC’s various license classifications and the corresponding lines of work that can be performed under such licenses. So, if a contractor performs any of the work listed below for over $1,000 for a job at any time, they will need to have a license and a surety bond.
| Class Name | Class Codes Prefix |
|---|---|
| Engineering Commercial Contracting | A |
| General Dual Engineering Contracting | KA |
| General Commercial Contracting | B (-1, -2 only) |
| General Residential Contracting | B |
| General Dual License Contracting | KB |
| Specialty Residential Contracting | R |
| Specialty Commercial Contracting | C |
| Specialty Dual Contracting | CR |
| Class Name | Class Codes |
|---|---|
| General Contractors | B, B-1, B-2, B-3, KB-1, KB-2 |
| General Engineering | A, B-4, KA |
| Acoustical systems | R-1, C-1, CR-1 |
| Asphalt Paving | A-14, R-13, CR-69 |
| Awnings, Canopies, Carports, Patios | R-3, C-3, CR-3 |
| Blasting | R-15, C-15, CR-15 |
| Boilers, Steamfitting, Piping | R-4, C-4, C-74, CR-4, CR-74 |
| Carpentry | R-7, C-7, CR-7 |
| Carpentry, Remodeling, Repairs (under $50k) | R-61, C-61, CR-61 |
| Comfort Heating, Ventilating, Cooling | C-58, CR-58 |
| Concrete | R-9, C-9, CR-9 |
| Drilling | A-4, R-53 |
| Drywall | R-10, C-10, CR-10 |
| Electrical | R-11, C-11, CR-11 |
| Electrical and Transmission Lines | A-17 |
| Elevators | R-12, C-12, CR-12 |
| Excavating, Grading, Oil Surfacing | A-5, R-2, CR-2 |
| Fencing | R-14, C-14, CR-14 |
| Finish Carpentry | R-60, C-60, CR-60 |
| Fire Protection | R-16, C-16, CR-16 |
| Flooring | R-8, C-8, CR-8 |
| Glazing | R-65, C-65, CR-65 |
| Hardscaping and Irrigation | R-21, C-21, CR-21 |
| House Moving | R-22 |
| HVAC and Refrigeration | R-39, C-39, C-79, CR-39, CR-79 |
| Insulation | R-40, C-40, CR-40 |
| Lightweight Partitions | C-27 |
| Low Voltage | R-67, C-67, CR-67 |
| Machinery | CR-29 |
| Masonry | R-31, C-31, CR-31 |
| Minor Home Improvement | R-62 |
| Ornamental Metals | R-24, C-24, CR-24 |
| Painting and Wall Covering | R-34, C-34, CR-34 |
| Piers and Foundations | A-7 |
| Plastering | R-36, C-36, CR-36 |
| Plumbing | R-37, C-37, C-77, CR-37, CR-77 |
| Pre-manufactured Spas | B-10 |
| Refrigeration (Commercial Industrial) | C-49 |
| Reinforcing Bar and Wire Mesh | R-70, C-10, CR-62, CR-70 |
| Roofing | R-42, C-42, CR-42 |
| Seal Coating | A-15, CR-66 |
| Septic Tanks and Systems | R-41, C-41, CR-41 |
| Sewers, Drains, Pipe Laying | A-12, CR-80 |
| Sheet Metal | R-45, C-45, CR-45 |
| Signs | R-38, C-38, CR-38 |
| Solar Plumbing Liquid Systems | C-78, CR-78 |
| Steel and Aluminum Erection | A-11, R-17, CR-17 |
| Swimming Pool | B-5, B-6, A-9, A-19 |
| Swimming Pool Service | R-6, C-6, CR-6 |
| Tile | R-48, C-48, CR-48 |
| Water Conditioning | R-54, C-54, CR-54 |
| Water Well Drilling | C-53, CR-53 |
| Waterworks | A-16 |
| Welding | R-56, C-56, CR-56 |
| Wrecking | R-57, C-57, CR-57 |
Are you a homeowner looking for more information on building a home in Arizona? If so, refer to Redfin's "Building a House in Arizona: Expert Guidance From Local Builders" article.
Arizona Contractor Bond Form Example
