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Arizona Construction Bond

Set your construction career on the right path by using Arizona construction performance bonds to your advantage. This quick guide outlines everything you will want to know.

What is an Arizona Construction Bond?

Construction bonds discourage contractors from underdelivering on expectations by holding them accountable for any damages that result from their behavior. This type of surety bond is an example of a contract bond, meaning a surety bond that's required to guarantee a contractual obligation. Project owners often include Arizona construction bond requirements in contracts to protect themselves from damages and risks caused by the contractors they hire.

How does a Construction Bond work in Arizona?

When a contractor fails to meet performance requirements outlined in the contract - for budget, timeline, quality, etc - the project owner may file a claim for damages against the surety bond. Claims get investigated by the surety agency that issues and backs the bond. Provided that the details of the claim hold up, the surety pays it automatically - bonds guarantee payment for those negatively affected by a contractor. After paying the claim, the surety will use whatever means necessary to collect the amount from the contractor, who accepted financial liability for claims under the bond agreement.

What is the purpose of an Arizona Construction Bond?

Construction bonds incentivize contractors to meet the levels of performance mandated under contract by holding them financially accountable when they don't. They also create a guaranteed mechanism through which project owners can seek and receive compensation for damages - a process that would be much harder without construction bonds. Since these surety bonds are an effective way to manage risk, they're a common requirement in construction contracts, especially those involving public sector projects.

Who needs an Arizona Construction Bond?

Anyone required to get one to finalize a contract. When a contract includes Arizona construction bond requirements, seek out a bond ASAP - waiting will only hold things up. Viking Bond Service can issue a wide variety of Arizona Construction Bonds and get you a quote within 24 hours.

Who are the parties involved in an Arizona Construction Performance Bond?

• Principal - The contractor or construction company required to obtain the bond. The principal is also financially liable for claims filed against the bond by the obligee.
• Obligee - The party that hires the principal. If the principal doesn't fulfill contractual requirements, the obligee may file a claim for compensation with the surety.
• Surety - The company that issues the construction bond to the principal. The surety also backs the bond, meaning it will pay the obligee for valid claims when the principal can't or won't. When this happens, the principal must, by law, pay the surety back in full.

How to get a Construction Surety Bond in Arizona

To apply for a bond, complete a bond application, submit to a credit check, supply a copy of the bond requirement specified in the contract, and turn over any additional documentation the surety asks for. You will receive a quote for the bond cost within 24 hours.

The cost of construction bonds varies widely depending on the state, the specific type of construction bond, and the scale of the project. In all cases, the cost (or premium) for the bond is a small percentage of its total value. Exact bond costs depend on the applicant's credit. If you're worried that bad credit could make it hard to get a bond, take advantage of a special program from Viking Bond Service.

Once you pay the premium, the surety agency will provide documentation to prove you've met the Arizona construction bond requirements.

Why you should get your Arizona Construction Bond from Viking Bond Service

Every contractor or construction company needs a solid bonding partner - someone they can rely on to meet all their bonding needs quickly, reliably, and affordably. Viking Bond Service understands why bonding matters to a business. And we know how it can be a burden. Our commitment is to make bonding something you don't stress about. We have worked with contractors across The Grand Canyon State, and we are eager to earn your loyal business as well.

Get a Construction Bond from Viking Bond Service

Get the bond(s) you need when you need them. We are here to provide you with answers and information about any aspect of bonding. Contact us in writing or call us at 1-888-278-7389 to get started.