Warm weather and high demand make Arizona an ideal place to set up shop as a general contractor — as long as you can take the heat in summer.
One of the first things you’ll need to operate in Arizona is a general contractor license.
You can do small jobs without a license, but getting your license makes you more competitive and allows you to scale to higher-paid contracts.
So how do you get a general contractor license, and what else do you need to operate as a general contractor in Arizona? We’ll break down everything you need to know:
- Do you need a license to be a general contractor in Arizona?
- How to get a general contractor license in Arizona
- General contractor license fees
- How long does it take to get a general contractor license in Arizona?
- How to renew an Arizona general contractor license
- General contractor license reciprocity
- Bond requirements for general contractors
- Insurance requirements for Arizona general contractors
- More resources for general contractors
Do you need a license to be a general contractor in Arizona?
You need a general contractor license in Arizona for any project worth more than $1,000 or requires a local building permit.
The rules are clear in Arizona: you need to be licensed if you want to bid or contract on projects that involve constructing, repairing or demolishing a building, according to the Arizona Registrar of Contractors (AROC).
Arizona general contractor license classifications
Arizona issues separate licenses for commercial and residential work, as well as dual licenses that cover both commercial and residential:
This license enables you to bid on any residential construction project, including houses, townhouses, condos and apartment complexes of four units or less.
Commercial (B-1 / B-2)
The Arizona ROC views commercial contracting as anything besides residential. This can include restaurants, retail stores and large apartment complexes.
General Dual License Residential + Commercial (KB- 1)
For projects that fall into both categories, you can get a license allowing you to bid on all residential and commercial construction projects.
There are several additional classification categories, including:
A - Engineering contracting (commercial)
B - General commercial contracting and residential contracting
R - Speciality residential contracting
KA - General dual engineering contracting
KB - General dual license contracting
CR - Speciality dual license contracting
C - Specialty commercial contracting
How to get a general contractor license in Arizona
To get a general contractor license in Arizona, here’s what you need:
A qualifying party
First, the AROC will ask for a “qualifying party.” If you’re the general contractor applying for a license, you are the qualifying party.
Four years of experience
You need to meet or exceed the license classification requirements you’re applying for. At least four years of experience at the journeyman level is required for residential, commercial and dual licenses.
Pass an exam
You’ll need to take PSI exams on business management and your trade. You must pass the license exams with a score of at least 70%.
Submit background check
As part of your application, you’ll need to include copies of the payment transaction receipt from your background check.
Form a legal entity
If you form an LLC or corporation, you’ll also need to register with the Arizona Corporation Commission. Partnerships are required to register with the Arizona Secretary of State.
Submit proof of a license bond
Your bond amount depends on which Arizona contractor license classification you’re applying for. Bonds can range from $9,000 to $15,000 for residential contractors and $5,000 to $100,00 for commercial contractors.
Pay license fees
The fee also depends on your license classification. More details can be found below.
Send in a copy of your government-issued identification, such as a driver’s license, with your application.
Send in your application to the registrar
After completing your License Application Form, the last step is to submit it. To make sure your application is approved, be sure to include all relevant and up-to-date documentation, including:
- Your business ID number
- Your financial statement
- A background disclosure statement
- Documentation-related experience requirements
You’ll also need to fulfill the exam requirements.
General contractor licensing fees
The fees for a contractor's license depend on what type and classification you’re applying for.
General commercial (A, B-1, B-2) - $200 application fee, $580 license fee
Specialty commercial (C) - $100 application fee, $480 license fee
General residential (B, B-3, B-4, B-5, B-6, B-10) - $180 application fee, $320 license fee
Specialty residential (R) - $80 application fee, $270 license fee
General dual (KA, KB-1, KB-2) - $200 application fee, $480 license fee
Specialty dual (CR) - $100 application fee, $380 license fee
The general residential, specialty residential, general dual and specialty dual classifications also have an additional $370 fee for “recovery fund assessment.”
How long does it take to get a general contractor license in Arizona?
The Arizona ROC outlines the following timeframes to issue a contractor license.
20 calendar days for administrative completeness review
Within 20 days, the registrar will let you know if your application is complete.
40 calendar days for substantive review
The registrar will review your qualifications and grant, deny or list anything missing from your application.
Avoid delays with this general contractor license checklist
Want to be sure to avoid delays? Make sure your application has all the requirements before you send it in:
- Examination results
- Background checks
- Papers for legal entity
- Government-issued identification
Supporting documents, including:
- Prior license disclosure forms
- License cancellation forms
- Felony disclosure forms
- Unlicensed Activity Disclosure Forms
- Solar Warranty
Including all required documentation will make it much more likely to fast-track your Arizona general contractor license application.
How to renew an Arizona general contractor license
You’ll need to renew your license every two years in Arizona. The cost for a renewal is the same as the initial license fee.
Licensed contractors with general residential, specialty residential, general dual or specialty dual classifications must also pay a $270 fee for “recovery fund assessment.”
How do you renew your general contractor license in Arizona? Start the process online at the Arizona ROC.
General contractor license reciprocity
Arizona passed a new law regarding universal licensing recognition, making it easier for people already licensed in another state to get licensed at the same level in Arizona.
Under the new law, Arizona's licensing boards will recognize out-of-state occupational licenses for people who:
- Have been licensed in their profession for at least one year
- Are in good standing in all states where they are licensed
- Pay applicable Arizona fees
- Meet all residency, testing and background check requirements
If you’re licensed in another state but move to Arizona, you still need to apply for a license through the appropriate Arizona licensing board before working.
The good news? You’re not required to duplicate training and other requirements, so Arizona’s policies on general contractor license reciprocity means you can begin work more quickly.
Bond requirements for general contractors
In Arizona, there are bond requirements for a contractor’s license. If you’re applying for a license, you need to file a Contractor’s Bond in the amount required for your license classification and your estimated gross volume of work each year.
The bond can be in the form of a surety bond or a cash bond, or you could provide a bond in the form of cash or a certificate of deposit from any bank which operates in Arizona.
Insurance requirements for Arizona general contractors
Even when safety is your top priority, your contracting business can encounter unexpected issues., and that’s why you need self-employed general contractor insurance.
General Liability insurance for Arizona contractors
A general liability policy can help protect you if something goes wrong at a job site, such as an injury to a third party or damage to someone else’s property.
Workers’ Compensation insurance for Arizona contractors
Workers’ compensation insurance can help cover lost wages and medical bills when an employee gets hurt on the job. By law, all employers must provide workers’ compensation insurance in Arizona for their employees.
Commercial Auto insurance for Arizona contractors
If you use a vehicle for commercial purposes and you or an employee is involved in an accident, commercial auto insurance can help cover medical expenses, property damage and other related costs.
More resources for general contractors
Need to know about Arizona’s license and insurance requirements for another trade? We’ve got it covered. Learn about the requirements for:
- General contractors in other states
How NEXT Insurance supports Arizona general contractors
NEXT can help you protect your business and get the general contractor insurance you need.
Our online services make it easy to get a certificate of insurance and apply for coverage for your business. You can even complete the process within minutes on your phone or computer.
We can provide small business insurance in Arizona, specializing in coverage for construction professionals. No matter what you need, we’ve got you covered.
Get an instant quote online today.