Guard Your Construction Business in Tucson, AZ with Adequate Bond Insurance
At The Insurance House, we assist your Tucson, AZ construction business in fulfilling Arizona’s legal requirement for bond insurance. The Arizona state government mandates general and specialty contractors to procure bond insurance. It sets monetary criteria for the bonds and necessitates a policy per license, signifying that a construction company with multiple licenses would need to purchase more than one bond insurance policy.
The Basics of Bond Insurance in Arizona
Also known as a surety bond, bond insurance reduces the risk for those who employ contractors, guarding against the possibility that the contractor might not complete the job or pay all debt associated with the project. A licensed contractor can advertise that they are “licensed and bonded,” a prominent selling point attracting more business. Hence, bond insurance is vital for gaining a competitive edge.
State Requirements for Contractors
The amount of bond insurance a contractor needs to purchase varies with their construction specialty and annual gross revenue. For instance, a residential general contractor (GC) earning more than $750,000 in annual gross revenue needs a bond for at least $15,000. On the other hand, a commercial specialty contractor, such as a master carpenter, earning between $150,000.01 and $500,000 in annual gross revenue, needs a bond for a minimum of $7,000. The Arizona Registrar of Contractors provides a matrix specifying the qualifiers and minimum bond amount needed.
Insurance for New Contractors
The Registrar uses the terminology “contemplated gross volume (per license),” so new contractors merely need to estimate their expected earnings in their first year of doing business. A contractor who adds a license by completing training and an apprenticeship can estimate the anticipated income that their new specialty would contribute.
Per License Requirement
Arizona requires a separate bond for each specialty. This implies that an individual with a plumbing license and an electrician license would need two bonds. However, just like other forms of commercial policies, your insurance company can list these separate coverages together in one document.
Protect Your Construction Business Today
Contact The Insurance House to ensure your Tucson, AZ, contracting business remains compliant. We help you acquire the necessary bond insurance to operate legally in the state.
