Why Bonds Matter for Contractors 

Contractor Bonds in Arizona – License, Bid & Performance Bonds

Contractor bonds aren’t the same as insurance—they don’t protect you, they protect your clients. These bonds guarantee that you’ll meet your obligations under state law or a specific construction contract. Whether required by the Arizona Registrar of Contractors or written into a project agreement, bonds give project owners and the public peace of mind that they’ll be compensated if a contractor fails to deliver.

Arizona Contractor License Bonds

In Arizona, the ROC requires licensed contractors to post a license bond (or provide a cash alternative) based on license type and

projected work volume. That bond amount can change when you renew your license based on your gross receipts.



We have several bond markets and can advise what limit you need depending on the volume of work you're doing,

residential and commercial.

Bonds never expect to pay a claim, and if they do pay a claim, you have indemnified them corporately and personally that they can come back against you to get their money back.

Contract Surety Bonds – Bid, Performance & Payment 

When bidding or working on larger construction projects, especially public ones, you may also need contract surety bonds. These include:

Bid Bonds

Guarantee that you’ll honor your bid and provide required bonds if awarded the job.

Performance Bonds

Guarantee that the project will be completed as contracted. If you default, the surety may step in or pay the project owner.

Payment Bonds

Ensure you’ll pay subcontractors, laborers, and suppliers. Helps avoid payment disputes or liens on the project.

Many Arizona public projects and private contracts require these bonds before work begins. If your personal credit score is 760 or higher, we can get you pre-qualified for bonding up to $750,000 per job, $1,000,000 aggregate. You can go on any city, county or other public entity website and view projects that they have for Contractors to bid on.

Other Bonds Contractors Might Need 

Some jobs may require specialized bonds. These include:

• Permit Bonds – Often required by cities or counties when pulling certain construction permits.
• Subdivision Bonds – Required when a contractor agrees to build infrastructure like roads or sewers in new developments.
• Maintenance Bonds – Guarantee workmanship and cover repairs for a period after project completion.

Not every contractor will need these, but if your project or jurisdiction requires one, we can secure it.

Bond vs. Insurance – Know the Difference

A contractor bond is a three-party agreement between you (the principal), the surety (the company issuing the bond), and the obligee (the entity requiring the bond). If a claim is paid out, you must reimburse the surety. That’s why getting bonded often requires good credit and financial standing—it’s a credit-based guarantee, not a risk-transfer product like insurance. In contrast, insurance covers your business and doesn’t require reimbursement.

Why Arizona Contractors Choose JP Insurance Group for Bonds 

We make bonding fast and simple. Whether you’re getting your first license bond or need help qualifying for a performance bond, JP Insurance Group has access to a wide network of surety partners and can shop for the best rates.

For smaller license bonds, we often issue them electronically—sometimes the same day. Our team also helps contractors build the financial history and business documentation needed to increase bonding capacity over time. For most small license bonds, annual premiums are affordable—sometimes as low as $50–$200 depending on your credit and bond amount.