Arizona Contractor License Bond

Before applying, ensure you meet the ROC's experience requirements for your desired classification. Most classifications require 4 years of journey-level experience or 2 years as a foreman/supervisor in the specific trade. You'll need documented proof through employer verification forms, W-2s, or business tax returns.

The qualifying party (the individual whose experience qualifies the license) must verify their experience through ROC Form RC L-200 or similar documentation. Experience must be in the specific classification sought - residential framing experience doesn't qualify for electrical licensing, for example.

Arizona requires two separate exams: the business management exam and a trade-specific exam. The business exam covers Arizona construction law, ROC rules, contractor business practices, lien law, and financial management. Trade exams test technical knowledge specific to your classification.

Recent pass rates are approximately 76% for business exams and 69% for trade exams. Exams are administered by PSI and cost $60 each. Study materials are available through the ROC website and third-party prep courses. Both exams must be passed within two years of application.

Retakes are permitted after a waiting period (typically 30 days for business exam, varies by trade exam). Each retake requires an additional $60 fee. Most contractors benefit from structured exam prep courses that cover Arizona-specific regulations and trade practices.

All qualifying parties must submit fingerprints for an Arizona Department of Public Safety (DPS) background check. This includes searches of both Arizona and FBI criminal databases. Certain felony convictions can disqualify applicants, though the ROC considers rehabilitation and time since conviction.

Background checks take 2-4 weeks to process. Financial history is also reviewed - outstanding tax liens, judgments, or previous contractor license revocations can affect application approval. Full disclosure of past issues is required; attempting to conceal disqualifying information typically results in denial.

Secure a contractor license bond in the amount required for your classification and anticipated annual gross volume. Bonds range from $1,000 to $100,000 based on the schedules outlined in A.R.S. § 32-1152. The bond must be issued by a Treasury-certified surety carrier authorized in Arizona.

Bond costs typically range from 1-3% of the bond amount annually for contractors with good credit. Poor credit may result in higher premiums (3-10%) or collateral requirements. Some sureties specialize in challenging credit situations. Shop multiple carriers for the best rates.

Residential contractors have an additional requirement: either pay an assessment into the Residential Recovery Fund OR obtain a second bond for $200,000. Most choose the Recovery Fund option as it's more economical than posting such a large bond.

While not legally required by the ROC, general liability insurance is practically essential. Many municipalities won't issue building permits without proof of insurance, and most commercial clients require $1-2 million in coverage. Residential clients increasingly request proof of insurance as well.

Typical policies provide $1 million per occurrence and $2 million aggregate coverage. Costs vary widely by classification - lower-risk trades like finish carpentry may pay $1,500-3,000 annually, while higher-risk classifications like roofing or electrical work can exceed $8,000-15,000. Consider bundled policies that include commercial auto, tools coverage, and workers' compensation.

Complete the appropriate ROC application form (varies by business structure and license type) and submit with all supporting documentation. Required items include exam score reports, experience verification, bond documents, financial statements, business entity documents, and application fees.

Application fees are $340 for residential or commercial licenses. The 2-year license fee is $430. If applying as a new business entity, additional fees apply. Total first-time costs including exams, bond, and fees typically range $1,200-2,500+ depending on classification and bond requirements.

Submit applications online through the ROC's AZ Link portal or by mail. Incomplete applications significantly delay processing. Include all requested documentation upfront to avoid deficiency notices that add weeks to the timeline.

The ROC reviews your application for completeness, verifies all documentation, and confirms bond and background check compliance. Initial applications typically take 30-45 days to process. Deficient applications or those requiring additional review may take longer.

During this period, the ROC may request clarification on experience documentation, financial information, or background issues. Respond promptly to any requests to avoid delays. You can check application status through the AZ Link portal or by calling the ROC licensing division at (877) 692-9762.

Once approved, you'll receive your contractor license number and certificate. Your license is valid for 2 years from the issue date. You must display your license number on all advertising, contracts, and vehicles as required by A.R.S. § 32-1151.

Maintain active bond coverage throughout your license term - letting your bond lapse results in automatic license suspension. Submit annual financial statements to the ROC showing gross volume, which may trigger bond increase requirements if you exceed your current tier. Renewal applications open 90 days before expiration and typically process within 14-21 days for contractors in good standing.