Quick Facts:

  • Regulating Agency: Arkansas Contractors Licensing Board
  • Required Bond Amount: $10,000 for commercial contractors
  • Cost Range: $100-$1,000 annually (depending on credit)
  • Required For: Commercial contractors, residential roofers, and HVAC contractors

What Is an Arkansas Contractor License Bond?

A contractor license bond is a surety bond that certain contractors must post as a condition of being licensed or permitted to work. In Arkansas, there are bonding requirements at both the state level and the local level (city/county). These bonds protect the public by guaranteeing that the contractor will comply with laws, regulations, and codes, and they provide a financial remedy if the contractor violates those obligations.

Who Regulates Arkansas Construction Contractor Licensing?

The Arkansas Contractors Licensing Board (and associated Residential Committee) oversees most contractor licensing in the state. This board handles commercial contractors and certain residential specialty contractors (notably roofing contractors). You can visit their official website at Arkansas Department of Labor and Licensing.

What Bond Amount Is Required in Arkansas?

The standard bond amount is $10,000 for commercial contractors performing projects of $50,000 or more. Residential roofing contractors must post a $15,000 bond. HVAC contractors must provide a surety bond or cash bond of at least $10,000 to obtain a license through the Arkansas HVAC/R Licensing Board.

How Much Does a Contractor Bond Cost in Arkansas?

The cost (premium) for a contractor license bond is only a fraction of the bond’s full amount. Contractors do not need to put up the entire bond sum in cash; instead, they pay a yearly premium to a surety company for the bond. The premium rate is primarily based on the applicant’s credit score and financial history. In Arkansas, a contractor with excellent credit might pay around 1%–3% of the bond amount annually, whereas a contractor with poor credit might pay 5%–10% of the bond amount.

For example, a $10,000 bond could cost as low as ~$100 per year for someone with good credit. If the applicant’s credit is shaky, the cost might be closer to $500-$1,000 per year.

Who Needs a Contractor License Bond in Arkansas?

Commercial contractors performing projects of $50,000 or more must post a $10,000 bond with the Contractors Licensing Board. This includes general contractors and specialty contractors who fall under the state’s commercial license threshold. Residential roofing contractors must maintain a $15,000 bond to register with the state. HVAC contractors must provide a $10,000 bond to obtain an HVAC/R license.

General residential contractors (home builders and remodelers) licensed by the Arkansas Residential Contractors Committee are not required by the state to post a surety bond.

What Other Contractor Bonds Are Required in Arkansas?

Many Arkansas cities require contractors to post a license or permit bond before doing work in that jurisdiction. These local bonding requirements vary by city in terms of amount and which types of contractors must obtain them. For example:

  • Little Rock requires a $10,000 contractor’s bond for general contractors, electrical, HVAC, plumbing, sewer, sign, maintenance, and concrete/paving contractors.
  • North Little Rock mandates a $10,000 contractor license bond for all contractors operating there.
  • Fort Smith requires a $2,000 permit & license bond for electrical, plumbing, and HVAC contractors.
  • Other cities such as Sherwood, Benton, Pine Bluff, Jacksonville, and Greenbrier also have their own bonding requirements.

How Does ContractorNerd’s Application Process Work?

Obtaining a contractor license bond is a straightforward process. You can apply with a surety company or authorized bond agency licensed in Arkansas. This can be done through local insurance agents or online surety bond specialists. You’ll need to fill out a bond application – typically providing basic information about your business (name, address, license type) and personal information for a credit check. In many cases, the application can be completed in a few minutes online.

How Quickly Can I Purchase a Bond?

Once you submit your application, the surety or agent will quote you the annual premium for the bond. If you have good credit, this quote will likely be at the low end of the range (around 1-3% of the bond amount). If the quote is acceptable, you will pay the premium to purchase the bond. Many providers allow payment online or over the phone. Some Arkansas bonds can be bought instantly for ~$100.

Who Files the Bond With the AR Once It Is Purchased?

The final step is to submit the signed bond to the entity that requires it. For a state Contractors Licensing Board license, you would mail or deliver the bond to the Board’s office in North Little Rock (they allow mail, fax, or email submissions of bonds). For a city bond, you would usually file it with the city’s building department or licensing office. The license will not be issued until the obligee receives and approves the bond.

How Are Claims Handled on an Arkansas Contractor Bond?

All contractor license bonds serve as a guarantee of the contractor’s compliance with the rules. The obligee (entity requiring the bond, e.g. the state board or a city) can claim against the bond if the contractor violates license laws, building codes, or fails to fulfill their contract obligations. If a violation occurs (say, a contractor abandons a job or does work that the city must fix), a claim can be made and the surety company may pay damages up to the bond amount to the harmed party (the customer or government). The contractor then must repay the surety for any claim paid (this is what differentiates a bond from insurance).

Frequently Asked Questions (FAQ)

What if I have bad credit?

Even contractors with credit challenges can usually get approved through specialty programs (often at a higher rate). The bond amount is relatively low, so approval chances are generally good even with less-than-perfect credit.

What are the penalties for not having a bond?

If a bond is allowed to lapse or cancel, the license can be suspended. Arkansas state law requires 60 days notice before a bond cancellation; if a contractor’s bond cancels and they don’t replace it, their license becomes invalid.

How do bond renewals work?

Contractor license bonds are typically issued for a one-year term (some sureties offer multi-year options for a discount). The bond must remain active as long as you are licensed. This means you will need to renew the bond annually by paying the renewal premium. The surety will usually send a renewal notice ahead of expiration.

What’s the difference between a bond and insurance?

A surety bond is not liability insurance for you; it protects the public/obligee. You are liable to repay any claims paid out. Avoid claims by adhering to contract terms, building codes, and ethical business practices.

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