Arizona Surety Bonds

Arizona is most notably known for its beautiful landscape and warm weather. However, the state also has a thriving economy, with a number of industries that are unique to Arizona. If you’re looking to start or expand a business in Arizona, it’s important to understand the surety bond requirements of the state. This guide will provide an overview of surety bonds in Arizona and help you get your surety bond quickly.

An Arizona bond is a financial instrument that guarantees the performance of a company or individual when they enter into an agreement with another entity. They can be used by businesses, individuals and government agencies for many purposes.

Some surety bonds are required by the state of Arizona, but many more are optional. It’s important to understand exactly what surety bond is needed for your industry before you apply so that you only have to get one surety bond.

What is a surety bond? How does a surety bond work?

It’s a type of contract that safeguards another party from financial loss. In the case of surety bonds, there are three parties:

• Principal (the person or business which needs to secure their liability)
• Surety (a third party, often an insurance company, who agrees to assume responsibility for the debt and acts as guarantor)
• Obligee (the person or business for whom the surety bond is being issued)

To issue an Arizona surety bond, both parties agree to the terms and conditions of a contract that carries an obligation to perform. These are usually written into an agreement that ensures compliance with state laws regarding Arizona surety bond requirements. The details covered include:
2) Surety’s obligation should they become financially liable because the Principal fails to meet their obligations under the contract

The important thing about a surety bond agreement is that all Principals and the approved Surety insurance company in Arizona act as guarantors; however, the Surety will be responsible for payment due to defaults on contractual agreements under the bond. The bond allows the surety company to seek repayment from the Principal if a claim is valid.

What is a surety bond used for?

Whats a surety bond you ask? Well, it guarantees an agreement between three parties by securing the obligation in that it is used to:

When do you need a surety bond?

Surety bonds are a form of performance security or financial guarantee issued by an insurance company. They are required for a variety of financial transactions, from government procurements to import and export. In the United States, bonds have been used since 1749 to guarantee that a party will fulfill its obligations under a contract or agreement.

Surety bond Arizona work as an integral part of any business’s success! Typically a transaction, contract, or professional licensing requirement will indicate if a performance bond, payment bond, contract bond, license and permit bonds, or another type of bond is needed.

What are contract bonds?

The largest category of Arizona bond is called contractor bonds, or bonds specific to the construction industry. AZ contractor surety bonds are one of the largest markets in the state. Contractor surety bonds more commonly are performance bonds, bid bonds, and payment bonds. Construction bonds account for approximately 70% of all bonds written in the USA.

Required by residential and commercial contractors both big and small, general and across specialty trades. Arizona surety bonding requirements vary by municipality and ensure the protection of the public and consumers via performance bonds for public projects and various trade bonds.

Can I get a surety bond online?

Yes. At Simpli Surety, we have 1000’s of instant issue surety bonds available to our clients on-demand at low surety bond rates. Our surety bond experts are here to help.

If you are looking for surety bond cost, the good news is that it’s not as expensive as most people think. Across the industry, Surety bond costs can range depending on the type and terms of the bond. The fee is calculated, also called the surety bond premium, as a percent of the total coverage needed or bond amount, usually ranging anywhere from 1% to 3%. For instance, straightforward license and permit bonds tend to fall on the lower end of the spectrum even below 1%. While a more complex performance bond for a large construction project that carries a higher risk and bond amount, therefore, the surety bond cost can range higher between 1.5% to 2.5% on average. 

Surety bond costs could be higher or lower depending on your surety company, the type of work you are doing, and other factors. If you need help determining how much a surety bond will cost for your specific situation, use our search to find the instant issue bonds you need, and often the surety bond cost and bond amount are listed on the application.

At Simpli Surety, we have 1000’s of instant issue surety bonds available to our clients on-demand at a low surety bond rate. The application and approval process is completed quickly, so you can get back to your business. 

On the rare occasion, your bond application requires additional underwriting, our surety bond agents with over 40 years of experience will step in to help.

Agriculture is one of the biggest industries in Arizona. Thanks to its arid climate, it’s a great place for farming cactus and cotton. It also has a number of important military bases and aerospace companies like Honeywell and Goodrich Corporation that employ thousands in Tucson alone.

There are a few different types of businesses that need surety bonds in Arizona. One is construction companies, which often have to post a bond to ensure they’ll complete their work according to the contract. Another is trucking companies, which are required to have a surety bond if they’re hauling goods across state lines.

In Arizona, you need to get bonded if you work with explosives. There are other industries that may require a surety bond as well; for example, if you sell or distribute alcohol, tobacco, firearms, or pharmaceuticals. You can check with your local government agency to see if there are any specific industries that are required to be bonded in your area.

A surety bond is basically an insurance policy that guarantees the performance of a third-party contractor or subcontractor on a construction project. It’s not designed to insure against any failures by its owner, only those it hires out to do business with them.

All in all, the industries of Arizona are vast and diverse, from technology to oil and gas, from food processing to aerospace engineering or biomedical research… If you’re looking for a surety bond there is no better place than Simpli Surety!

How do you get bonded in Arizona?

In order to get bonded in Arizona, you will need to contact surety bond companies that are licensed in the state, such as Simpli Surety. You will then be required to fill out an application and submit it along with all relevant documentation. Some applications may require additional documents like proof of business bank account balances or your articles of incorporation (bylaws), but Simpli Surety has many instant bonds available in minutes.

If you are approved for coverage, the surety bond company will issue you a policy and send it to you via email or mail. The policy will outline the terms and conditions of your bond as well as the surety company’s responsibilities.

Why would I need a surety bond in Arizona?

A surety bond in Arizona is a common requirement for many types of businesses including car dealerships, home builders and financial services companies.

Surety bonds are financial guarantees that you promise to abide by the terms of an agreement. For example, if you enter into an Enterprise Zone Program with this state , it is required for your business to have one. Other reasons why businesses may require these include:

What are some other most common surety bonds in Arizona?

There are a few surety bonds that are common in Arizona. The most common surety bond is the commercial surety bond. This type of surety bond is used for businesses that want to get a license, or for companies that need to show financial responsibility. There are also many types of performance bonds, including construction and contract bonds.

Another surety bond common in Arizona are the license and permit surety bonds. This surety bond may be required for a company that needs to get a business or professional license from the state of Arizona, as well as any other type of permit. Some examples include contractors, financial institutions, utility companies, and public service corporations. The final surety bond that is important for companies to understand in Arizona is the court surety bond. This surety bond can be required when a company needs to appear before a court and present evidence, such as real estate agents and collection agencies.

Is it easy to get a bond in Arizona?

It actually is! The state of Arizona has made it really simple and fast to apply for a surety bond. If you choose to get your bond online, the process can be completed within minutes!

What are the minimum bonding requirements in Arizona?

The amount of money required as a surety bond in Arizona ranges depending on the industry and type of contract or agreement you plan to enter. There is no minimum amount for this type of bond, but our surety partners have to be compensated for any losses they incur on your behalf, so the higher the bond amount – the better protection you get!

Which government agencies require surety bonds in Arizona?

Arizona surety bonds are required by a number of government agencies, including the:

There are surety bond requirements for other government agencies in Arizona, but the above four are some of the most common. Be sure to check with your specific agency to find out their specific bonding requirements. If you’re not sure where to start, contact a surety bonds agent for assistance. They will be able to help you determine which

What are the most popular types of surety bonds in Arizona?

There are three main types of surety bonds in Arizona: performance, payment, and indemnity. A performance bond guarantees that the contractor will complete the project as specified in the contract. A payment bond guarantees that subcontractors and suppliers will be paid for their work on the project. An indemnity bond protects the owner of a property from any third-party claims arising from the contractor’s work on a project.

Arizona surety bonds are required for many different types of projects. Some examples include:

Arizona has a major construction industry that requires performance guarantees in the form of surety bonds to protect against failing to meet deadlines. There are also many contractors who require bond protection for their employees – especially when they’re working on bridges, tunnels or other public works projects.

What other surety bonds are common?

Common across all states is the forever mainstay Construction industry. As a large and populous state, contracting is big business. Required by residential and commercial contractors both big and small, general and across specialty trades. Arizona’s bonding requirement varies by municipality and trade but all ensure the protection of the public and consumers via performance bonds for public projects.

The best surety company in Arizona is us! SimpiSurety has all of these bonds and more AZ surety bonds available instantly. Search for your bond and apply online in minutes.

Although, whomever you choose, be sure they are a licensed Arizona surety bond agency that can help you get bonded for the right bond amount. All surety companies are not the same, so choose wisely when choosing your Arizona bonding agent.

Contractor license surety bonds aren’t only state mandated bonds for businesses. In fact many industries and professions that require licensing or the proprietor to register their business with a state commission or regulatory body require a surety bond, including:

• Arizona Notary Bond – pledges a notary will perform his or her duties required by the state in accordance with ethical standards and in compliance with state laws. The bond ensures client protection and credibility to the notary. Coverage $10,000 + E&O Buy Now
• Arizona Taxpayer Bond for Contractor – Contractors who have transaction privilege tax licenses and those who have contracts worth more than $50,000 with the state of Arizona must post an Arizona taxpayer bond. Although every contractor in the state is not required to have these bonds, some departments within the state may demand them if a new license applicant was engaged in business under a previous license or if a new license applicant had a prior license revoked. Buy Now
• Arizona Money Transmitter Bond – Money transmitters in Arizona are required to obtain a license from the Department of Insurance and Financial Institutions under Arizona Statute 6-1202. The state legislature passed licensing rules and regulations to ensure that money transmitters conduct themselves in an ethical manner. Buy Now
• Arizona Escrow Agent Bond – Under Arizona law, title or escrow agents that want to conduct business in the state must be licensed by the Arizona Department of Financial Institutions (AZDFI), which requires a $100,000 Escrow Agent bond. Buy Now
• Arizona Collection Agency Bond – In the state of Arizona, Collection Agency Licenses are required for entities and individuals who solicit claims for collections – or collect claims owed or due to a third party – in order to legally operate. The Arizona Department of Financial Institutions (AZDFI) is in charge of licensing and monitoring. Buy Now
• Arizona Motor Vehicle Dealer Bond – Arizonians are not strangers to traffic. Used car, motorcycle and ATV dealers must secure an auto dealer bond as a part of the licensing process to ensure they are capable of and can maintain ethical business standards. Buy Now

For all Arizona Surety Bonds and Federal Bonds, use the search atop this page or Click for More Bonds below.

• Freight Broker Bonds – often referred to as BMC-84 bonds, are a Federal as opposed to state mandate made by the Federal Motor Carrier Safety Commission to conduct business as transportation brokers. Coverage to $75,000. Buy Now
• Durable Medical Equipment Provider Bonds – often referred to as DMEPOS bonds are required of suppliers of prosthetics, orthotics, and durable medical equipment. A federal mandate per the Centers for Medicare and Medicaid Services to mitigate Medicate billing fraud. Min bond requirement of $50,000 per National Provider Identifier needing Medicate billing authorization. Buy Now
• Performance Bonds – this bond covers general performance obligations related to a contract but most often ensures the satisfactory completion of performance by a contractor. The bond penalty is tied to contract value and can be mandated at federal, state, or municipal levels. Buy Now
• Bid Bonds – a construction bond that protects the developer or project owner of a construction project during the bidding process. It guarantees them that if the bidder can or will not honor the terms of the bid, the owner will be compensated. Bid bonds are commonly required on projects that also involve performance bids and payment bonds. Buy Now
• Payment Bonds – these surety bonds are often paired with performance bonds ensuring prompt payment to suppliers and subcontractors on the project. This signals to the owner, supplier, and sub that the contractor will be compliant in working with them to completion and paying on time. Buy Now