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Arizona general contractor license and insurance requirements

Arizona general contractor license and insurance requirements

By Courtney Westlake
Feb 22, 2022
9 min read

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 the 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?

You need a general contractor license in Arizona for any project that is 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:

Residential (B-)

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 ROC 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 a business management exam and a trade exam, and pass them by 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.

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

The amount of your bond depends on which 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.

Submit identification

Send in a copy of your government-issued identification 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
  • Any relevant experience

You’ll also need to fulfill the exam requirements.

Arizona 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 or not.

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
  • Bond
  • Fees
  • Government issued identification
  • Signatures

Supporting documents, including:

  • Prior license disclosure forms
  • License cancellation forms
  • Felony disclosure forms
  • Unlicensed Activity Disclosure Forms
  • Solar Warranty

By including all required documentation, you will be much more likely to fast-track your Arizona general contractor license application.

How to renew a Arizona general contractor license

You’ll need to renew your license every two years. The current cost for a renewal is $580.

How do you renew your general contractor license in Arizona? Start the process online at the Arizona ROC.

Arizona’s general contractor license reciprocity 

Arizona passed a new law regarding universal licensing recognition, which makes it easier for people who are 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 mean you can begin work more quickly.

Bond requirements for Arizona 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, there will be an issue, and that’s why you need self-employed general contractor insurance.

General Liability insurance

In a well-run general contractor business, there’s no doubt you should be covered by a general liability policy. This basic policy protects you when and if something goes wrong at a job site.

Workers’ Compensation insurance

By law, all employers are mandated to provide workers’ compensation insurance in Arizona for their employees. Workers’ comp insurance covers employee injuries and illness, and they can’t file claims against you. 

Commercial Auto insurance

If you use a vehicle for commercial purposes, you need commercial auto insurance to cover any liabilities for injuries or property damage.

How NEXT Insurance supports Arizona general contractors

NEXT can help protect your business and get the general contractor insurance you need.

Through our online services, we make it easy to acquire a certificate of insurance and apply for coverage for your business. It can even be completed within minutes on your phone or computer!

We are able to provide small business insurance in Arizona, specializing in coverage for construction professionals. No matter what you need, we’ve got you covered. 

Check out our website and get an instant quote online today.

Which states require general contractor licenses? Visit our summary of general contractor license requirements in every state.

Arizona general contractor license and insurance requirements

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About the author
Courtney Westlake is a writer and journalist with 10+ years of experience crafting content, specializing in B2B and financial writing. She's contributed to Stripe, HSBC, BigCommerce, Woman’s Day and the TODAY Show.
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