# Arizona Encroachment Permit Bonds: ADOT, Phoenix and Tucson URL: https://mycontractorsinsurancequote.com/construction-surety-bonds/encroachment-permit-bonds/arizona Updated: 2026-10-29 · Reviewed by the Principal, Gleason Insurance Brokers, LLC Publisher: My Contractors Insurance Quote, a website of Gleason Insurance Brokers, LLC ADOT requires an encroachment permit from the district office for any work in the state right of way, and its guidelines leave bonding to the district: a district may require a surety bond and third-party quality control on major developments, and it may require an installation drawing bond from a utility that has not delivered as-installed drawings. Every ADOT permit also carries indemnity and insurance conditions, including additional insured and waiver of subrogation endorsements for the State and ADOT. Arizona cities set their own security; Phoenix, for example, requires a construction assurance equal to the cost of the right-of-way work before it releases right-of-way construction permits. ## Key Decision Points - ADOT bonding and quality control are at the district's discretion, with major developments singled out in Bulletin 25-03. - Utilities that miss ADOT's 90-day as-installed drawing rule can be required to post an installation drawing bond. - ADOT permits require indemnity, additional insured status on general and auto liability and a waiver of subrogation. - Phoenix accepts cash, a performance bond or a letter of credit equal to the cost of the right-of-way work, released after acceptance and as-builts. - Tucson's pavement cut moratorium on recently paved major streets can change restoration scope and risk. ## ADOT: Who Issues Encroachment Permits and Under What Authority ADOT requires a permit for any work within the state right of way, including highways, driveways, grading, fence removal or replacement, surveying and geotechnical investigation. Permits are issued by the ADOT district office where the encroachment is located, and the application package varies by encroachment type. ADOT's Encroachment Permits Guidelines and Procedures cite the director's authority under A.R.S. §28-363 and §28-7045 and the encroachment rules in Arizona Administrative Code R17-3-501 through R17-3-509, with encroachments and penalties addressed in A.R.S. §28-7053 and §28-7054. For bond planning, the key sentence in ADOT's plan submittal guidance is short: quality control, quality assurance and bonding are at the discretion of the district where the project sits. That means two projects of similar size in different districts can come back with different security requirements, and the district's permit conditions, not a statewide schedule, decide the bond. ADOT also publishes a separate performance bond bulletin, so ask the district permit office which version it applies before the surety sees the request. For how permit bonds work across all four states, see [encroachment and right-of-way permit bonds](https://mycontractorsinsurancequote.com/construction-surety-bonds/encroachment-permit-bonds). ## ADOT: Major Developments and Bulletin 25-03 Bulletin 25-03, effective April 3, 2025, sets requirements for design engineers and contractors when a development alters or modifies a highway under ADOT control. It defines major developments as large commercial sites such as motels, resorts and shopping centers, subdivisions with 50 or more single-family dwellings or any development that generates 1,000 or more average daily trips or 120 vehicles per peak hour, whichever is more conservative. Alteration of existing roadway includes new pavement for right or left turn lanes, acceleration lanes or travel lanes needed for the development's traffic. For those projects, the abutting owner or developer retains an Arizona-registered civil engineer to prepare a traffic impact analysis or statement, which ADOT's regional traffic staff must approve before the permit process begins, and a registered engineer designs and seals the improvement plans. The contractor section then says the owner, developer or contractor submits a certificate of insurance with endorsements showing ADOT and the State as additional insureds, and that ADOT district offices may also require a surety bond and third-party quality assurance and quality control. A developer building a large subdivision entrance on a state route should plan for both. For the other Arizona rules that shape a development program, see [Arizona developer insurance and bonding](https://mycontractorsinsurancequote.com/arizona/audiences/developers). ### Illustrative scenario: A 300-Lot Subdivision Entrance on a State Route Outside Phoenix A developer's 300-lot subdivision in the Phoenix area needs a deceleration lane and new access on a state route plus water, sidewalk and curb work on a city arterial. Because the subdivision exceeds 50 single-family dwellings, ADOT treats it as a major development under Bulletin 25-03, so a traffic impact analysis must be approved before the permit process, and the district asks for a surety bond and third-party quality control on the turn lane. The city's right-of-way permits will not be released until the developer posts an assurance equal to the cost of the arterial work, and the developer chooses a performance bond over a letter of credit to keep its bank line free. The surety reviews both obligations together, and the broker confirms that the site contractor's policies can name ADOT and the State as additional insureds with a waiver of subrogation. ## ADOT: Utility Permits and the Installation Drawing Bond ADOT's conditions for utility permits say all utility encroachments in the highway right of way require a valid permit that can be revoked. No party other than the named permittee or the permittee's contractor may work under it. Any change to the design, location or construction of an approved permit's plans needs ADOT approval before it happens. After the work, the utility must provide drawings showing the horizontal location and vertical elevation of its facilities within 90 days of completion, which ADOT notes are not a substitute for marking facilities under Arizona's underground facilities law, A.R.S. §40-360.21 and following. The bond enters when a utility falls behind. Section 2.3.18 lets ADOT require an installation drawing bond on new permits after written notice of noncompliance with the drawing rule, upon a demonstrated history of noncompliance and failure to correct it within a reasonable time. The amount is based on the estimated cost of verifying the location of the utility's facilities, the bond is refunded upon compliance and failure to comply may result in forfeiture. For an underground contractor working under a utility's permit, a missing drawing set can therefore become the utility's bond problem and, through the subcontract, the contractor's. For the program an underground contractor carries on utility work, see [underground utility contractor insurance and bonds](https://mycontractorsinsurancequote.com/who-we-serve/civil-underground-utilities/underground-utility-contractors). ## ADOT: Indemnity and Insurance Conditions ADOT's permit requirements ask the permittee to assume legal liability and financial responsibility for the encroachment activity for its duration and to indemnify, defend and hold harmless ADOT and the State for claims arising from the negligent or willful acts or omissions of the permittee, its contractors or subcontractors. That indemnity extends to claims under the workers' compensation law and to the contractor's failure to follow applicable law. The permittee and contractor provide certificates consistent with the ADOT Permit Insurance Matrix, naming the State of Arizona and ADOT as additional insureds on general liability and automobile liability and providing a waiver of subrogation in favor of the State and ADOT for all coverages. The insurance must stay in force for the permit term and may not be canceled or materially changed without 30 days' written notice to the State, and ADOT may raise or lower limits based on the risk. Whether a contractor's existing endorsements meet that wording depends on the policy forms, which is why a broker review before application is worth the time. For ROC licensing, Arizona 811 and public works rules for civil contractors, see [Arizona civil and infrastructure contractor requirements](https://mycontractorsinsurancequote.com/arizona/audiences/civil-infrastructure-contractors). ## City Example: Phoenix Right-of-Way Construction Assurances Phoenix calls its permit security a construction assurance. Chapters 31 and 32 of the Phoenix City Code require the customer to provide an assurance that improvements will be installed according to the approved plans and that the customer will provide record drawings. The customer's civil engineer determines the secured amount, which the Planning and Development Department approves under the City's fee schedule, and posting the assurance is a pre-condition to final construction plan approval and release of right-of-way construction permits. It is also a pre-condition for site plans, subdivision plats, lot divisions, off-site improvements compliance and plat recording. Phoenix accepts cash, a performance bond or a letter of credit, each in an amount equal to the cost of the right-of-way work, and on building projects it may accept an occupancy clearance agreement that withholds final utility clearance until the work is accepted. That agreement attaches to the parcel and binds later owners. The City's bond form recites that the code makes it unlawful to cut or grade pavement, driveways, sidewalks, curbs, gutters, pipelines or landscape in the right of way without a permit and incorporates Chapters 31, 32 and 32A. Cash, bonds and letters of credit are released after the off-site inspector accepts the permit and required as-builts are submitted. For other Phoenix-area rules that affect contractors and developers, see [Phoenix metro construction insurance](https://mycontractorsinsurancequote.com/arizona/metros/phoenix). ## City Example: Tucson, and Why Each City Reads Differently Tucson issues right-of-way permits through its Department of Transportation under Chapter 25 of the City Code, and a permit may go to a public utility, public agency, contractor or individual. The City's permit brochure points to a site plan, a traffic control plan where lanes or sidewalks are affected and ATSSA-certified barricading for any excavation, and right-of-way work is built to details and specifications set by the city engineer. It also describes a pavement cut moratorium: major streets newly built or overlaid within the past five years are subject to it, and permits on them are issued or denied case by case under TDOT engineering stipulations. The brochure we reviewed does not set out a bond amount, so confirm current security requirements with the permit center before bidding. The moratorium matters even without a bond, because a cut allowed on a recently overlaid street may carry heavier restoration conditions and longer exposure for paving and utility contractors. Phoenix and Tucson are only two examples; Arizona cities each adopt their own right-of-way rules, so read the permit conditions of every city on the project. For the restoration and completed operations exposure paving contractors carry, see [paving contractor insurance and bonding](https://mycontractorsinsurancequote.com/who-we-serve/civil-underground-utilities/paving-contractors). ## Before You Ask for a Quote ### What to Gather - The ADOT encroachment permit application and the district's permit conditions - Traffic impact analysis or statement and its ADOT approval for major developments - The civil engineer's cost estimate for work in the state and city rights of way - The city's assurance requirements and required bond or letter of credit form - Certificates and endorsements meeting the ADOT Permit Insurance Matrix - As-installed drawing status for any utility permits held by the owner or utility ### What to Ask the Insurer or Surety - Will the district require a surety bond or third-party quality control on this permit? - Which version of ADOT's performance bond bulletin does the district apply? - What amount will the city accept as the assurance, and which forms does it allow? - What triggers release: inspector acceptance, as-builts or both? - Can our policies name ADOT and the State as additional insureds with a waiver of subrogation on every coverage? - Is the street we plan to cut under a pavement cut moratorium? ## Broker Notes **Quick Answer:** ADOT leaves bonding to the district: a district may require a surety bond and third-party quality control on major developments and an installation drawing bond from a utility behind on as-installed drawings, while cities such as Phoenix require a construction assurance equal to the cost of the right-of-way work. **Common Mistake:** Applying to ADOT before the insurance endorsements are in place. The permit requires additional insured status on general and auto liability and a waiver of subrogation on all coverages, and a certificate without them can hold up the permit. **Broker Perspective:** On a large subdivision entrance, the ADOT bond and the city assurance are separate obligations that may fall on the same developer, so present them to the surety together rather than one at a time. **Coverage Impact:** ADOT's indemnity reaches the acts of the permittee's contractors and subcontractors, so whether the permittee's liability policy responds depends on its insured contract and additional insured wording. ## Questions Buyers Ask ### Does ADOT require a performance bond on every encroachment permit? No. ADOT's guidelines say quality control, quality assurance and bonding are at the discretion of the district where the project sits, and Bulletin 25-03 says districts may require a surety bond on major developments. Utilities can also be required to post an installation drawing bond after failing to deliver as-installed drawings. Ask the district permit office what it will require before applying. ### What makes a project a major development for an ADOT encroachment permit? Bulletin 25-03 defines major developments as large commercial sites such as motels, resorts and shopping centers, subdivisions with 50 or more single-family dwellings or any development generating 1,000 or more average daily trips or 120 vehicles per peak hour, whichever is more conservative. These projects need an approved traffic study and sealed improvement plans, and the district may require a bond and third-party quality control. ### What insurance wording does ADOT require on an encroachment permit? ADOT asks for certificates consistent with its Permit Insurance Matrix, naming the State of Arizona and ADOT as additional insureds on general liability and automobile liability, with a waiver of subrogation in their favor on all coverages. Coverage must stay in force for the permit term with 30 days' notice before cancellation or material change, and ADOT may adjust limits to the risk. ### Can we use a letter of credit for a Phoenix right-of-way permit? Yes. Phoenix accepts cash, a performance bond or a letter of credit in an amount equal to the cost of the right-of-way work, and it may accept an occupancy clearance agreement on building projects. Each is released after the off-site inspector accepts the permit and required as-builts are submitted. A letter of credit usually ties up bank-line availability, while a bond requires surety underwriting. ### How does Tucson's pavement cut moratorium affect a utility job? Tucson's permit brochure says major streets newly built or overlaid within the past five years are subject to a pavement cut moratorium, and permits on them are issued or denied case by case. If a cut is allowed, expect heavier restoration conditions. Check the street's status before bidding, because the answer can change the trench route, the restoration cost and the exposure after the work. ## Official Sources 1. [ADOT Encroachment Permits Guidelines and Procedures (2026), including Bulletin 25-03 and utility permit conditions §2.3](https://azdot.gov/sites/default/files/2026-01/Encroachment-Permits-Guideline-Procedures.pdf), Arizona Department of Transportation. Statutory and rule authority; district discretion on bonding and QA/QC; major development definition, traffic study and sealed plans; surety bond and insurance endorsements; indemnity and insurance matrix terms; utility permit conditions, 90-day installation drawings and installation drawing bond Verified 2026-10-24. 2. [ADOT Encroachment Permits](https://azdot.gov/business/permits/encroachment-permits), Arizona Department of Transportation. Permits required for any work in state right of way; issued by district offices Verified 2026-10-24. 3. [City of Phoenix Right-of-Way Construction Assurances (TRT 00032, rev. 12/21)](https://www.phoenix.gov/pddsite/Documents/TRT/dsd_trt_pdf_00032.pdf), City of Phoenix Planning & Development Department. Chapters 31 and 32 assurance; amount set by civil engineer and approved by PDD; pre-condition to permit release; accepted instruments equal to cost; occupancy clearance agreement; release after acceptance and as-builts Verified 2026-10-24. 4. [City of Phoenix Performance Bond form (TRT 00452)](https://www.phoenix.gov/content/dam/phoenix/pddsite/documents/trt/external/dsd_trt_pdf_00452.pdf), City of Phoenix Planning & Development Department. Permit required to cut or grade pavement, driveways, sidewalks, curbs, gutters, pipelines or landscape in the right of way; bond incorporates Chapters 31, 32 and 32A Verified 2026-10-24. 5. [City of Tucson Right-of-Way Permits brochure](https://www.tucsonaz.gov/files/sharedassets/public/v/1/transportation-and-mobility/documents/rowbrochure2018-web.pdf), City of Tucson Department of Transportation. Chapter 25 authority; who may obtain permits; site and traffic control plans; ATSSA barricading; pavement cut moratorium on major streets built or overlaid within five years Verified 2026-10-24. ## Related Decisions - [ADOT contract bond requirements](https://mycontractorsinsurancequote.com/construction-surety-bonds/public-agency-contractor-requirements/adot) - [right-of-way permit bonds across the Southwest](https://mycontractorsinsurancequote.com/construction-surety-bonds/encroachment-permit-bonds) - [Arizona public works bond statutes](https://mycontractorsinsurancequote.com/construction-surety-bonds/public-works-bond-requirements/arizona) - [Arizona subdivision assurances](https://mycontractorsinsurancequote.com/construction-surety-bonds/subdivision-improvement-bonds/arizona) - [concrete sidewalk contractor insurance](https://mycontractorsinsurancequote.com/who-we-serve/civil-underground-utilities/concrete-sidewalk-contractors) - [Buckeye development insurance](https://mycontractorsinsurancequote.com/arizona/metros/phoenix/buckeye) --- Start a quote request: https://mycontractorsinsurancequote.com/get-a-quote · Call 844-978-7283 Contract and insurance reviews are a courtesy service that may be available at times, depending on our workload and on the size, timing and complexity of the project. A review is not guaranteed and is limited to insurance considerations. It is not legal advice and is not a substitute for advice from your own legal counsel, which you may need before signing a contract or obtaining coverage. Insurance and surety services are provided through Gleason Insurance Brokers, LLC. Site information is educational and does not constitute legal advice, a binder, an offer of coverage, a guarantee of eligibility or confirmation of policy terms. Insurance conditions are governed by actual issued policies; surety rights and obligations are governed by bond and indemnity documents.