What a contractor license bond is
Some states, and many cities and counties, make contractors post a bond to get or renew a license. It protects customers, workers and the public if the contractor breaks the licensing laws, for example by abandoning a job or not paying workers. The contractor repays the surety for any claim it pays.
In Arizona
Arizona licensed contractors must file a license bond with the Registrar of Contractors under A.R.S. § 32-1152. The amount depends on the license classification and the contractor's estimated annual volume of work in Arizona.
- Residential contractors also pay into the Residential Contractors' Recovery Fund or post a $200,000 surety or cash bond.
- General dual license bonds list residential and commercial amounts separately.
You need this bond if you're
- A contractor applying for a new license
- A contractor renewing or reactivating a license
- A business changing its entity type or qualifier
- A contractor starting work in a city or county that requires its own bond
What the surety looks at
Basic business and owner details. Most license bonds need a credit check but no financial statements.