What is an Arizona Contract Bond?
Arizona contract bonds, also known as Arizona construction bonds, are a category of surety bonds that provides a guarantee that a contract will be fulfilled. While they are used in a range of circumstances, they are most commonly used in construction projects.
Who Needs an Arizona Contract Bond?
Arizona contract bonds are most commonly required by government agencies for work on a public construction project, but more private companies are requiring the bonds, too. Therefore, nearly every contractor will need to obtain an Arizona contract bond at some point.
Why Do I Need an Arizona Contract Bond?
Contract bonds provide assurance that the project developer will recover any financial losses if the contractor doesn’t complete the terms of the contract. Since the term “contract bond” refers to a category of Arizona surety bonds, many types of contract bonds may be required at different stages of a project to ensure it is completed according to the contract.
How Much Does an Arizona Contract Bond Cost?
The cost of an Arizona contract bond will vary depending on the type of surety bond required for your role in a project. Additionally, Arizona contract bonds are subject to underwriting, and therefore are dependent on the credit score of the contractor. Those with good credit may find premiums as low as 1% of the bond.