As a residential contractor, you help build the dreams of families and individuals who are trying to make or renovate a home. You are responsible for their project and you need to ensure that you conduct yourself ethically and to the best of your ability. To make sure that your customers are protected, you must hold a surety bond.
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What is an Arizona Residential Contractor Bond?
An Arizona Residential Contractor Bond is a type of surety bond requried for a contractor license in Arizona. This bond is an agreement between three parties: the principal, the obligee, and the surety company. As the person or organization that seeks the bond, you are called the principal. The obligees are the people who rely on you to complete your work. As a contractor, you must abide by the statutes of your field and ensure that you see projects through to successful completion. If you do not, your obligees may suffer financial hardship. In that case, your surety bond is there to ensure that the obligees are compensated. Ultimately, you are responsible for ensuring that you pay for any claims made against your company.
Who Needs an Arizona Residential Contractor Bond?
When you're a residential construction contractor in Arizona, you need an Arizona Residential Contractor Bond. A residential general contractor may contract with residential property owners to supervise, arrange, or perform construction projects, while a specialty contractor's work focuses on specific trades.
In Arizona, the Residential Contractor Bond is part of your licensing requirements, but the bond amount required varies depending on your volume of work. Residential general contractors who have a volume of less than $750,000 in work require a bond of $9,000, while those who have a volume of more than $750,000 need a $15,000 bond.
How to get an Arizona Residential Contractor Bond
To get a residential contractor bond, you'll work with a surety company to get quotes to meet your bond needs. The surety company underwriter will collect business and financial information and will ask you to provide this information about your company. You may require information about your successful completion of past projects, project references, credit history, and access to credit.
When you receive a bond, you only need to pay a percentage of the total posted bond amount. The surety company will work with you to determine this percentage based on your business and financial history. The percentage amount tends to vary between 1 and 15 percent of the total amount and can change as your business grows and changes.
When you're looking for a surety bond, Surety Solutions can help. Our experienced staff can work with you to find the bond products that you need for your business. With our OneClick system, you'll have access to up to 30 quotes on your bond products. Contact us today for a quote.