Home to the Grand Canyon and a number of other National Parks, Arizona is the 14th most populated state with over 7 million residents. It was the 48th state, with Arizona’s Admission to the Union coming in 1912. The state has a variety of climates, from the hot, desert like south, to the high peaks and ski resorts of Northern Arizona. Nearly ¼ of Arizona is comprised of Native American reservations.
A surety bond is a three-party agreement between; the business or person required to get the bond (Principal), the company issuing the bond (the Surety), and the entity that requires the bond (the Obligee).
The purpose of an Arizona surety bond is to protect consumers, institutions, and the general public from financial damages resulting from fraud, malpractice, or negligence on behalf of the Principal. Damaged parties file a claim against the bond seeking compensation. If a surety pays a claim, the Principal must reimburse the surety company.
There are a wide variety of surety bonds required in Arizona. These bonds fall into three primary categories:
Here are some of the most common types of bonds in the State of Arizona:
Contractor license bonds
Arizona contractor license bonds are required by the Arizona Registrar of Contractors (AZROC) for contractors that want to work on construction, plumbing, electrical, and other types of products.
In addition to the state contractor license bonds, some cities such as Phoenix and Tempe require their own bonds for their local contractors.
Motor Vehicle Dealer Bonds
The Arizona Division of Motor Vehicles requires car, motorcycle, and all-terrain (ATV) vehicle dealers and wholesalers to ensure they conduct ethical business practices.
Below are some other types of Arizona surety bonds:
The cost of an Arizona surety bond depends on two factors; the total bond amount and your bond premium.
The bond requirements for Arizona surety bonds are set by the obligee. It represents the maximum amount that the surety may pay if someone were to make a successful claim against the bond.
Below are the required amounts for some popular AZ surety bonds:
Your premium is the percentage of the required bond amount that you need to pay to get the bond. For example, a $100,000 bond with a 1% premium would cost $1,000 to get.
Premiums for surety bonds in Arizona normally range between 1% and 15%. The variance is the result of the difference in risk between kinds of surety bonds. Some bonds are riskier than others. For these bonds, the surety company will charge higher premiums to cover against potential claims.
Depending on the bond, the surety company may review your personal qualifications such as financial history and industry experience when underwriting the bond. Bad credit won’t prevent you from getting a bond but you may need to pay a slightly higher premium.
Fill out an application below to get a free bond quote, typically within 24 hours. We shop around for the best rates for your financial situation. If you can’t find the bond you’re looking for, email apps@southcoastsurety.com or call 800-361-1720 for expert surety help!
