Secure Contractor Bonds Services in the Greater Phoenix Area
The Best Bonded Contractors With Ideal Insurance Agency
At Ideal Insurance Agency, we understand the critical role contractors play in the vibrant community of Glendale, AZ. Our contractor bond services are tailored to meet the unique needs of businesses in the construction industry. With years of experience serving the Phoenix area, we’ve established ourselves as trusted partners in providing comprehensive insurance solutions. Secure your projects with confidence – explore our contractor bond services today and build your future with peace of mind.
What Is a Bonded Contractor?
A bonded and insured contractor is a professional in the construction or contracting industry who has obtained a surety bond as a form of financial protection for their clients. The surety bond serves as a guarantee that the contractor will fulfill their contractual obligations and adhere to industry regulations and standards. In the event that the contractor fails to meet these obligations, the surety bond provides a financial remedy for the affected parties. Bonding is typically required for contractors bidding on public projects, and it is a way to ensure accountability and quality in construction projects.
Contractor Bond License Requirements
The bonding requirements set forth by A.R.S. § 42-5006 are essential for ensuring tax compliance and financial responsibility among contractors in Arizona. New contractors, those without a principal business location in the state, and those with a history of Transaction Privilege Tax (TPT) noncompliance are typically mandated to provide a bond to the Department of Revenue as a guarantee for tax payment. A principal place of business is defined as maintaining a facility in Arizona with at least one full-time employee over the preceding 12 months. According to A.R.S. § 42-5006, contractors conducting business for less than a year in Arizona or with a principal place of business outside the state must uphold the bond for a minimum of two years.
Bond Amounts
The bond amounts specified by A.C.C. R15-5-601(B) for various business classes serve as a crucial financial safeguard in the construction industry, ensuring accountability and protection for clients. According to our expert team, here’s a breakdown of the bond amounts based on business classifications:
- $2,000 Bond – This category includes general contractors of residential buildings (other than single-family), operative builders, and various specialized trades such as plumbing, air conditioning, heating, painting, electrical work, and more.
- $7,000 Bond – General contractors engaged in single-family housing projects and those involved in water, sewer, pipeline, communication, and powerline construction fall under this category.
- $17,000 Bond – Reserved for general contractors overseeing industrial buildings, warehouses, and nonresidential buildings (other than single-family).
- $22,000 Bond – The highest bond amount is allocated for heavy construction, bridge construction, tunnel construction, and elevated highway construction.
Paperless Annual Bond Exemption Certificates
The Arizona Department of Revenue has transitioned from issuing paper Annual Bond Exemption Certificates to in-state contractors to an electronic system. Contractors in good standing can now access their exemption status more efficiently, with the Department of Revenue providing an electronic listing of exempt contractors to each city. If a contractor is not on the list, the city may require certification from the Department of Revenue before issuing the permit. The electronic system also allows the Department of Revenue to issue one-time exemption certificates for specific projects to qualified contractors, resulting in cost savings and increased efficiency for both contractors and government entities.
Annual Bond Exemption
The Annual Bond Exemption serves as documentation for city building authorities, confirming that contractors have fulfilled bonding requirements as outlined in A.R.S. § 42-5007 for projects valued at $50,000 or more. To qualify, contractors must meet specific criteria, including having a transaction privilege license with a start date at least one year prior to the current date, having no more than two delinquencies in the past 12 consecutive months, having no more than $500 in current tax liabilities, maintaining an Arizona address for mailing or physical purposes, and ensuring a minimum payment of $10.00 in tax liability for the past 12 consecutive months. This exemption streamlines the documentation process, ensuring compliance and transparency in construction projects.
Contact Ideal Insurance Agency
Empower your construction endeavors with Ideal Insurance Agency‘s unwavering commitment to excellence in contractor bond services. Our tailored solutions in Glendale, AZ, reflect our dedication to supporting the success of local businesses in the construction industry. As you embark on your projects, trust us to navigate the complexities of contractor bonding, providing you with the assurance and protection you need. Connect with our experienced team today, and let’s fortify your construction business together.