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Minnesota Contractor Bonding Requirements
Not all Minnesota contractors are required to get bonded, but certain cities and counties have requirements for some holders of certain contractor licenses. There are statewide requirements for some specialty contractors as well.
If you have been required to post a contractor license bond, it’s important to be aware of the responsibilities it carries. It’s a type of surety bond agreement between three parties: a principal (the contractor), an obligee (the agency requiring the bond), and the surety (a bonding company underwriting the bond).
Contractor license bond ensure contractors comply with the provisions of their license types. They also act as protection to their clients, employees and the state. If a contractor violates the terms of their bond agreement, they can face a claim, serving to compensate third parties that may have suffered as a result of the violation.
Keep reading for more useful information about contractor license bonds in Minnesota.
Questions about Contractor License Bonds in Minnesota
Where in Minnesota is a bond required from contractors?
The following places require a contractor license bond from some holders of contractor licenses:
- Brainerd
- St. Paul
- Minneapolis
Furthermore, the following types of contractors are required to post a bond as well:
- Water conditioning contractors
- Subsurface sewage treatment contractors
- Plumbers
- Electricians
- Residential roofers
- Elevator contractors
- Technology system contractors
- Masonry contractors
Make sure to contact your local regulation authorities to find out which exact requirements apply to you and your business.
How much do contractor license bonds cost in Minnesota?
Surety bonds are paid in premiums, usually annual ones. To calculate yours, you first need to know the required total amount of your bond. The total amount, also known as the penal sum of the bond, refers to the coverage the bond can offer to a claimant.
Your premium will vary between 1%-3% of this amount if you have a high credit score, but can go up to 10% if you have bad credit. Check out the table below for total amounts by location and license type.
| Bond Type | Surety Bond Amount | Above 700 | Between 650-699 | Between 600-649 | Below 599 |
|---|---|---|---|---|---|
| Water Conditioning Contractor Bond | $3,000 | $100 | $100 | $100-$150 | $150-$300 |
| St. Paul Sidewalk Contractor's Bond | $5,000 | $100 | $100 - $125 | $125-$250 | $250-$500 |
| Masonry Contractor Class A License Bond Minneapolis Specialty Contractor Bond Individual Sewage Treatment Contractor Bond |
$10,000 | $100-$150 | $100-$300 | $300-$500 | $500-$1,000 |
| Residential Roofer Contractor Bond | $15,000 | $188-$375 | $250-$750 | $625-$1,250 | $1,250-$2,500 |
| Technology System Contractor Bond Plumbing Contractor Bond Electrical Contractor Bond Elevator Contractor Bond Mechanical Contractor Bond |
$25,000 | $188-$375 | $250-$750 | $625-$1,250 | $1,250-$2,500 |
Bond amounts for some contractor bonds cannot be displayed here, because their amounts are determined on a case-by-case basis. If your bond is one of them, contact your local authority to inquire about the total amount before you apply to get bonded.*
The estimates above are based on credit score alone as this is considered the most important factor during the underwriting process. However, other information about your business can also affect your premium. Find out all about it on our “What Does a Surety Bond Cost?” page.
What happens if I have bad credit?
Even though it’s important in the underwriting process, bad credit alone won’t prevent you from getting bonded. In fact, 99% of applicants with a low credit score or past-due items in their report can still get bonded, albeit at a higher price.
Two exceptions are applicants with open bankruptcies, and those who are late on their child support payments. You can learn more about getting bonded with bad credit on our specially dedicated page.
How do I apply for my contractor bond?
Applying for the bond you need is a straightforward process. You can submit our online application, which takes only a few minutes to complete. If you provide ownership information, this will help us give you a more precise bond quote.
After you submit the application, we’ll contact you with a free no-obligations quote. Next, we’ll go over the paperwork with you and let you know what we need to finalize your application. After we process your payment, turnaround time is usually one or two business days.
We will send you the signed bond form via email. You’ll need to include this form with your license application, but you can request copies via fax or email.
How do I get a Minnesota contractor license?
Here are some of the steps you need to undertake to get a Minnesota contractor license:
- Get a Tax Identification Number
- Register with the Secretary of State
- Get a Federal Employer Identification Number (EIN)
- Buy workers’ compensation and unemployment insurance (if required)
- Pay applicable fees
What happens in case of a claim?
What constitutes a source of a claim can differ based on your license type. This is why it’s essential that you understand local building codes and all regulations that apply to you. Violating the bond agreement can make you liable for amounts up to the penal sum of your bond. Furthermore, applicants with a history of past claims may see their next bond application refused.
If you think a claim against you doesn’t have a solid legal ground, you can try to fight it in court, sometimes with the help of the surety. Sureties can provide legal assistance if they feel you haven’t broken the rules.
Still got questions about Minnesota contractor bonding requirements? Just call us at (877)-514-5146 and our surety agents will help.
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Quick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
Long story short, these guys cut through the B.S. and get the job done. Responsiveness, excellent! Communication, excellent! Respect for their industry partners, excellent! John, Collette, Ryan, you're all-stars! Thank you!
We decided for Lance Surety Bond's quote for 2 reasons; Price and Customer Service. Our Representative Ryan was just SUPERB!! [...] I highly recommend Lance Surety Bond for all your Bonding needs! I'll definitely come back for all of mine. :-) Thanks Ryan!
Quick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
Long story short, these guys cut through the B.S. and get the job done. Responsiveness, excellent! Communication, excellent! Respect for their industry partners, excellent! John, Collette, Ryan, you're all-stars! Thank you!
We decided for Lance Surety Bond's quote for 2 reasons; Price and Customer Service. Our Representative Ryan was just SUPERB!! [...] I highly recommend Lance Surety Bond for all your Bonding needs! I'll definitely come back for all of mine. :-) Thanks Ryan!
