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General Contractor

Arkansas general contractor license and insurance requirements

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By Next Insurance Staff
Feb 9, 2021 min read

There are currently over 15,000 general contractors in Arkansas. If you’d like to join them, you’ll need to complete the licensing requirements and learn the rules of doing business in the state.

Fortunately, Arkansas has recently made some changes to simplify its licensing. The state board now provides a temporary license for some candidates, and all applicants have the option to provide a surety bond in lieu of financial statements.

However, getting an Arkansas contractor license still involves multiple steps. Continue reading to learn more about:

  • General Arkansas contractors license requirements
  • How to get an Arkansas commercial contractor license
  • Where to submit an Arkansas contractors license renewal
  • Insurance required by the Arkansas contractors license board

Interested in working in another state? Check out our general contractor licensing requirements guide.

How to become a contractor in Arkansas 

The process to become a contractor in Arkansas depends on whether you are already licensed in another state or not. Arkansas doesn’t have reciprocity agreements, but you can get a temporary license while working through the Arkansas state licensing process if you already hold a valid contractor's license elsewhere.

For new contractors in Arkansas, formal education is not required, but you will need references that can support that quality of your work as part of the license application process. You’ll also need to meet certain bond and insurance requirements, which we'll explain in more detail below. 

Additionally, if you plan to start a new general contracting business and work on commercial projects, you’ll need itemized financial statements to prove that you have the financial backing to support your new business.

What are the requirements to get a general contractor license in Arkansas?

The specific requirements to get a general contractor license in Arkansas will vary slightly based on the type of license you need. For a contractors license, Arkansas generally requires the following:

  • A completed application for the specific license type
  • A $100 filing fee
  • Three references who can verify work experience and aren’t related to you
  • A $10,000 contractors’ bond (for commercial license applicants only)
  • Passing scores on the Arkansas contractors license test (which includes a business and law section)
  • Financial statements prepared or reviewed by a CPA or a surety bond 
  • Proof of workers’ compensation insurance coverage if you have employees

All applicants must pass both sections of the license test (trade and business and law) to qualify for a license, so using an Arkansas contractors license practice test is recommended.

General contractor license types

Here's a closer look at the different general contractor license types in Arkansas:

Residential Builders License: This license allows a contractor to build a new single-family residence and perform structural changes, remodels or additions to all residential projects over $2,000. A residential builder's license will not allow for commercial projects over $50,000.

Residential Remodelers' License: With this license, you can perform major structural changes or additions to single-family residences for projects over $2,000. A residential remodelers' license will not allow for commercial projects or completely new builds.

Home Improvement License: You’ll want this license if you plan to perform specialty work, such as painting, roofing or flooring, on single-family residences for projects over $2,000. A home improvement license will not allow for commercial projects, new builds or home remodels.

Commercial license: With this license, you can work on commercial projects over $50,000.

Subcontractor registration certificate: This license allows a subcontractor to work on projects in Arkansas under a contract with someone who already holds an Arkansas contractor's license. For a subcontractor’s registration certificate to be valid, the prime contractor must hold the appropriate license required for all contracted projects.

Common challenges for obtaining a license

If you are properly licensed in Arkansas for a specific type of project, you still may not be legally allowed to perform all the work for that project.

Outside the Arkansas State Contractors Licensing Board, there are 16 state agencies that regulate certification and licensing for specific work classifications, such as HVAC or sprinkler system contractors. 

For example, if your project requires electrical work, you may need to obtain an Arkansas electrical contractor's license before completing that part of the project.

Performing work during construction projects without the proper state license or certification may be illegal, so all contractors must have a clearly outlined scope of work and check with multiple licensing agencies before beginning any projects.

Another challenge can be the timeline. Once you open an application, it only stays active for 90 days unless you pay an additional filing fee, so careful planning is a critical part of the application process.

It can take some time to gather the reference forms, study and pass the exam and secure the required bond and insurance.

You must submit your fully completed application to the licensing office at least three weeks before a board meeting for review.

How to get a general contractor license in Arkansas

After you’ve gathered all the application requirements, you’ll need to submit your documentation directly to the Arkansas Contractors Licensing Board. Once they issue your license, contractors can complete the renewal process online, but documents for a new license can only be delivered directly to the office in-person, by fax or by mail.

How long does it take to get a general contractor license?

Arkansas requires you to complete the application and submit all additional requirements at least three weeks before a committee meeting for review. The Arkansas Contractors Licensing Board meets every three to four weeks, and all contractor license applications must go before the board for approval. 

Contractors should plan for the application process to take approximately three months, which includes the time to gather and submit the application requirements and the time for review and approval by the board.

The licensing board does offer to expedite applications for active-duty military, veterans and their spouses. 

Insurance requirements for Arkansas General Contractors

In addition to the insurance and bonds the state requires, you will want insurance coverage to help protect yourself from risks that can happen during the normal course of business. Here's what you should know. 

General liability insurance for Arkansas contractors

Unlike many other states, Arkansas does not require general liability insurance coverage for general contractors. However, not carrying this policy can leave you and your business open to a considerable amount of risk.

General contractor insurance policies provide a double layer of protection by combining both general liability and professional liability coverage into a single policy. The former helps protect you against property damage and bodily injury claims, while the latter guards your business against claims of negligence or other mistakes that can happen in your line of work.

Many customers require contractors to hold minimum levels of liability coverage before they are hired for the job. This protects you and your client from accidents during the project and shows potential customers that you conduct business carefully and professionally.

Commercial auto insurance for general contractors

If you will have work trucks or other vehicles as part of your contracting business, you’ll also need to carry commercial auto insurance. Whether your vehicles are small commuter cars with your business name on the title or larger work trucks used for carrying supplies and equipment, Arkansas requires commercial auto coverage for any vehicles owned by a business.

Workers’ compensation insurance

You’re required to have active workers’ compensation insurance in Arkansas if you have emplooyees. However, you can also benefit from having coverage if you are a sole proprietor. Workers’ comp provides coverage for medical bills and lost wages if you or an employee are injured on the job.

How Next Insurance helps general contractors in Arkansas

Next Insurance helps Arkansas general contractors to quickly get the coverage they need for licensing and project requirements. From workers’ compensation coverage to liability policies for commercial projects, our seamless online services can help you get coverage and a certificate of insurance in as little as 10 minutes. 

Get started with an instant quote online today.

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