Arizona General Contractor License and Insurance Requirements

The Grand Canyon State is a popular place to work as a general contractor. Arizona is in the top 15 states with the most construction jobs, and its year-round warm weather may create a shorter “off-season” for your business.

But before you can begin work, getting a contractor’s license in Arizona may be a priority.

We’ll break down how to get a general contractor license in Arizona, so you can start growing your construction or renovation business.

Do you need a general contractor license in Arizona?

A general contractor license in AZ is required for projects worth more than $1,000 or that require a local building permit (regardless of the cost of labor and materials). Licenses are granted by the Arizona Registrar of Contractors (AROC).

You may not need a contractor license to work as a residential handyman. However, getting a contractor’s license in Arizona could benefit your business. If a project that requires you to be licensed comes your way, you’ll be able to accept the work without delay.

Customers may also prefer to work with someone who is licensed. A general contractor license shows that you have industry-accepted knowledge and experience to work as a contractor. You’re a professional who has put the time and effort into proving this experience and can back up your work.

Who can get an Arizona contractor’s license?

You can apply for an AZ contractor license if you are 18 years or older and meet general requirements, including:

• Minimum work experience – Typically four years, though this varies depending on the type of license(s) you apply for.
• Pass the necessary exams – You may be required to pass a statutes and rules exam (SRE), trade exam, or both.
• Pass a background check
• Submit proof of bond – The value of the Arizona contractor bond you are required to purchase depends on the license you apply for and the gross volume of work you expect to complete in a year.

The AROC website has more details on who can apply for a general contractor’s license in the state.

Getting a contractor’s license in Arizona

Here’s a breakdown of how to become a licensed contractor in Arizona:

1. Confirm you are ready to apply – Sole proprietors or partnerships must have an ID that matches their first, middle, and last names provided on the application. LLCs and corporations must form a legal entity before applying.
2. Choose your licensing classification – Arizona offers general commercial contractor and general residential contractor licenses, as well as a dual option that covers both. There are also many specialty licenses that cover trade work (i.e., drywall, carpentry, electrical, appliance repair, etc.)
3. Pass the required exam(s) – You may be able to waive the test requirement if you meet certain conditions, such as holding a current out-of-state license.
4. Submit background checks and copies of your government-issued ID.
5. Show proof of Arizona contractor bond
6. Pay the application and licensing fees – These vary based on the type of contractor license(s) you apply for.

Once you’ve completed the above steps and finalized your application, the AROC will review your application and grant you an AZ contractor’s license if you qualify for one. Contractor licenses must be renewed every two years.

Contractor insurance in Arizona

Business insurance helps many Arizona contractors protect themselves, their employees, and their small businesses. Some policies may be required to work in the state, while others can bring much-needed peace of mind to busy general contractors.

You might consider contractor insurance options such as:

• General Liability insurance can protect your business against bodily injury or property damage lawsuits from outside parties. This type of policy may be required by the clients you work with or by your commercial landlord.
• Workers’ Compensation insurance provides protection for employers if an employee suffers a work-related illness or injury. It is mandatory for most Arizona businesses to have this coverage if they have one or more employees.
• A Business Owner’s Policy (BOP) is a combination of policies, combining covers such as General Liability insurance and business personal property coverage, to help protect small businesses from costly interruptions to service. Your BOP can be customized to include coverage that suits your business needs, such as protecting your equipment or helping you weather unplanned business interruptions.

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