Get An Instant Quote on Arkansas Commercial Contractor’s License Bond ($10,000) Now
Like many states, Arkansas requires contractors to be licensed and obtain an Arkansas Contractor License Bond. These bonds are required by most resident and non-resident contractors doing business in the state. Learn more about these Arkansas Contractor License Bonds, including how to easily obtain one.
An Arkansas Contractor License Bond guarantees that the licensed contractor will uphold and comply with all the codes and regulations of the State of Arkansas including the Arkansas Contractor Licensing Law. The licensing process is handled by the Arkansas Contractor License Board.
An Arkansas Contractor License Bond is a three-party guarantee between a contractor, a surety bond company and the state of Arkansas. The licensed contractor is the principal on the bond. The contractor is agreeing to comply with the terms of the Arkansas Contractor Licensing Code. The Surety Bond Company is the third party guaranteeing that the contractor will keep the codes. The obligee is the state of Arkansas who is receiving the benefit of the bond’s guarantee on behalf of the general public. If the contractor does not uphold the code, a claim could be made against the bond through the state. The Surety Bond company will then investigate the claim and pay out if the claim is valid.
All commercial contractors and commercial registered subcontractors working in the state of Arkansas will need an Arkansas Contractor License Bond. This include both resident and non-resident Arkansas contractors. The state defines a contractor as:
“ any person, firm, partnership, co-partnership, association, corporation, or other organization, or any combination thereof, that for a fixed price, commission, fee, or wage attempts to or submits a bid to construct or demolish, or contracts or undertakes to construct or demolish, or assumes charge, in a supervisory capacity or otherwise, or manages the construction, erection, alteration, demolition, or repair, or has or have constructed, erected, altered, demolished, or repaired, under his or her, their, or its direction, any building, apartment, condominium, highway, sewer, utility, grading, or any other improvement or structure on public or private property for lease, rent, resale, public access, or similar purpose, except single-family residences, when the cost of the work to be done, or done, in the State of Arkansas by the contractor, including, but not limited to, labor and materials, is fifty thousand dollars ($50,000) or more.”
The $50,000 threshold is meant to be a limit for an entire project. A contractor cannot divide a project into separate contractors to get around this requirement.
Arkansas Contractor License Bonds are required to be in the amount of $10,000. This amount represents the full bond penalty and the most the surety bond company will have to pay regardless of the number of claims. However, exhausting the bond limits does not relieve the contractor of liability and additional amounts that they may owe.
Arkansas Contractor License Bonds cost 1%, or $100 for most contractors. This premium will be due annually for as long as the bond and license are in place. Some bond companies will provide discounts for purchasing multiple years upfront.
Arkansas Contractor License Bonds are very easy to obtain. They are instantly issued, and no credit check or financial information is needed. Simply fill out the online form and have the bond issued in minutes.
The Surety Bond company can cancel an Arkansas Contractor License Bond at any time by providing sixty (60) days written notice to the principal contractor and the Arkansas Contractor License Board. Cancelation will not relieve the surety of any claims that took place during the period when the bond was active or during the 60-day cancelation period.
If the bond is canceled, the licensed contractor will need to replace the bond with another bond or risk having their license suspended.
The agent issuing the bond needs to be a resident or non-resident agent licensed with the Arkansas Department of Insurance. A copy of the agent’s insurance license actually needs to be sent to the Arkansas Contractor License Board along with the bond.
It is important for contractors to understand that Arkansas Contractor License Bonds are not insurance. If a claim is made against the bond and the surety bond company must pay, they will then seek reimbursement from the contractor. In this way, surety bonds resemble credit products. You can read more about indemnity here.
Arkansas Contractor License Bonds are needed for contractors to obtain a commercial license in the state. However, the state may also require other bonds in order to get licensed. A common additional bond needed for licensing is an Arkansas Contractor Bond in Lieu of Financial Statement. These bonds are required when contractors do not provide a Reviewed or Compiled financial statement to the Contractor Board for licensing.
Additionally, commercial contractors often need contract bonds such as performance bonds, payment bonds, and bid bonds. These are separate obligations and the underwriting criteria to get these bonds are very different. Many other Arkansas License Bonds can be purchased instantly here.
Arkansas Contractor License Bonds are required for most commercial contractors wanting to perform work in the state of Arkansas. Fortunately, these bonds are inexpensive and easy to obtain. They are also a valuable tool for protecting the public.
Axcess Surety is the premier provider of surety bonds nationally. We work individuals and businesses across the country to provide the best surety bond programs at the best price.
