North Dakota Surety Bond Regulations
Surety bonds are a regulatory mechanism used by all states to protect third parties against loss. Most often, surety bonds are a requirement for a business that’s applying for a license, similar to getting insurance.
Unlike insurance, surety bonds are required for the protection of the state and the business’s clients, not the business itself. The bond agreement is backed by a surety, which assumes legal and financial responsibility for the actions of the bonded party (principal).
In North Dakota, there are a number of businesses that will need to get bonded prior to getting licensed. Several other circumstances may warrant a bond as well. You can look for the bond you need in the table below. But even if you can’t find it, we can still help. We offer all types of bonds in North Dakota; just call us at (877)-514-5146.
Find Your North Dakota Surety Bond
Market Agencies/Dealers BondRoving Grain Buyer's BondNorth Dakota Public Services COmmission
Agricultural (Non-Livestock) BondRoving Grain Buyer's BondPublic Service Commission
Contractor License (No P&P Language) BondLicenseBondDepartment of Commerce
Contractor License Performance & Payment (State) BondManufactured Home Installer BondNorth Dakota Department of Commerce
Contractor License Third Party Liability BondContractor License Third Party Liability BondPublic Service Commission
Collection Agency BondCollection AgencyDept of Financial Institutions, Consumer Division
Professional Fund Raisers BondUniform Professional FundraiserSecretary of State
Mortgage Broker (1st & 2nd Mortgages) BondSurety Bond for Money BrokersDept of Financial Institutions, Consumer Division
Mortgage Lender/Banker (1st & 2nd Mort.) BondMortgage LenderDept of Financial Instituions, Consumer Division
Auto & Mobile Home Dealers (New & Used) BondMotor Vehicle DealerDepartment of Transportation - Motor Vehicle Divis
Auto & Mobile Home Dealers (New & Used) BondMobile Home and Manufactured Home Dealer BondDepartment of Transportation
Auto & Mobile Home Dealers (Used Only, No New) BondMotor Vehicle DealerDepartment of Transportation - Motor Vehicle Divis
Employment Agencies BondProfessional Employer Organization BondSecretary of State
Itinerant Merchants BondTransient MerchantAttorney General
Itinerant Merchants BondItinerant Merchants BondCity of Grand Forks
Itinerant Merchants BondItinerant Merchants BondCity of Mandan
Itinerant Merchants BondItinerant Merchants BondCity of Minot
Retail Stores & Service ShopsTransient Merchant BondConsumer Protection & Antitrust Div- Office of AG
Professional Licenses (All Other) BondTransient MerchantConsumer Protection & Antitrust Div - Office of AG
Professional Licenses (All Other) BondDeferred Presentment Service Provider BondND Department of Financial Institutions
Sales, Use & Consumer Tax BondSales and Tax PermitOffice of the State Tax Commissioner
Auctioneer's (Net Proceeds Meet Amount) BondAuctioneerPublic Service Commission
Frequently Asked Questions
What are the different types of surety bonds in North Dakota?
Usually, you will be required to post one of the following three categories of bonds:
- License and permit bonds are the types of bond that businesses need when applying for a license or a permit in ND. Some examples include collection agencies, money transmitters, contractors, grain buyers, and transient merchants.
- Contract bonds may be required from a contractor bidding or performing work on a construction project. Usually, these bonds are required on large public projects, but increasingly they are also being required for P3 and private projects as well.
- Court bonds can be required to guarantee that a third party will uphold their legal obligations in front of a court. Court bonds are also required from some individuals appointed by a court as custodians, fiduciaries, or guardians.
What’s the cost of getting bonded in North Dakota?
How much you will end up paying to get bonded depends on a number of factors. To get started, you need to know the required total value of your bond. This total value is sometimes referred to as the bond’s penal sum.
For auto dealer bonds, the total bond amount is $25,000, meaning that a claim against the dealer’s bond cannot exceed $25,000. To get bonded, the dealer needn’t pay that full amount upfront. Instead, they pay a yearly premium to the bonding company in exchanges for its backing.
Premiums depend mostly on the applicant’s FICO score. Applicants with a score of 700 may pay as little as 1% of the bond’s value, which means that a bond of $25,000 may cost just $250 a year. Premiums tend to go up as the applicant’s credit score goes down, and can reach 15% for some bonds. In most cases, however, they won’t go above 10%.
It’s important for surety bond applicants to understand the other factors that influence their premiums, so they can prepare a stronger application. These include financial statements– business or personal– as well as a resume of their experience. The business’s age is also a factor. Find out more on our “What Does a Surety Bond Cost?” page.
How do I get my North Dakota surety bond?
The application process is simple, but there are small differences based on whether you are applying for a contract bond or a license bond.
License Bond Application
All you need to do to get your license bond is submit our online application– it takes just five minutes. We’ll respond with a free bond quote based on the information you provided, and, once you purchase your bond, we’ll mail you the original bond form within two business days.
Contract Bond Application
To apply for a contract bond simply download our application, fill it out, and send it back to us via fax or email.
You can get pre-approved for a bond line of up to $500,000. If you need a higher bond line, you must have a certified CPA prepare financial statements for the past 3 years.
Most Popular Surety Bonds in North-dakota
A $5,000 or a $10,000 bond is required from auctioneers and auction clerks when getting licensed in the state. The requirement is mandated by Chapter 51-05.1 of the North Dakota Century Code.
Collection agencies must post a $20,000 surety bond as part of their licensing application. The bond ensures compliance with Chapter 13-05 of the North Dakota Century Code.
Dealers of mobile and manufactured homes need to secure a $50,000 bond, required for the protection of mobile home buyers in the state.
New and used-car dealers alike are required to get bonded in order to buy and sell vehicles for profit. The amount of the bond is $25,000.
Retailers who make taxables sales must post a sales tax bond, which protects the state in case merchants fail to declare and pay relevant state taxes. The North Dakota Office of the State Tax Commissioner determines the amount based on the applicant’s volume of sales.
To make sure they are compliant with Chapter 51-04 of the North Dakota Century Code, the North Dakota Consumer Protection and Antitrust Division requires all transient merchants to get bonded in order to legally operate in the state.