Contractors are required by law to file bonds and recovery funds. The amount
that you would file for a
contractor bond—either surety or cash—would depend on the type of license
and your projected yearly gross.
Contractor Bond Licensing Requirements
Regardless of the license classification, a new applicant must determine
his or her expected in-state productivity volume within the fiscal year
at hand. When renewing a license, volume estimates must be done on a form
suited for the state's Registrar of Contractors, which won't be
held liable for inaccurate work-volume estimates entered on to said form.
Licensed Contractor Bond Amounts
If a licensee deliberately underestimates his or her projected gross, it
could be interpreted as material falsification and therefore grounds for
suspension or termination of license. A licensee can have the amount of
a bond raised at any time, but it cannot be lowered until renewal time
at the close of the fiscal year. Bonds are
not effective until the listed date, which could be specified as either on or after the date of filing with
the Registrar's office.
Ways to Get Contractor Bonds
In Arizona, you can get a surety bond from any insurance company that has
been authorized to issue contractor bonds by the Department of Insurance.
A bond can also be produced with cash or a bank certificate. For a certificate
of deposit, you can get a cash-alternative form by contacting any office
of the Arizona Registrar of Contractors.
Termination or Cancellation of Bonds
A surety bond has no termination date, but you could be bound to periodical
insurance premiums to keep the bond effective. The issuing company may
cancel a bond, but not without sending a 30-day notice to you and the
Arizona Contractor License Center, we provide state bonding services to local contractors. We also offer
study programs where contractors can gain the knowledge and skills necessary
to pass the state's contractor licensing test. To learn more about
our services, call our Phoenix office at (888) 738-3175.