North Dakota Contractor Bonding Requirements
Water well contractors in the state of North Dakota– as well as some contractors in Grand Forks– are required by state law to get bonded before they are given a license.
The purpose of these contractor license bonds is to ensure that contractors perform work in accordance with applicable regulations and local building codes. If a contractor is found to be in violation of the terms of the bond, an affected party can seek compensation from the bonding company which signed their bond.
Make sure that you’re aware of all the regulations that pertain to your trade in order to steer clear of bond claims. Even though the surety may initially provide compensation to a claimant, you are ultimately the party that’s legally and financially responsible for the claim.
Want to learn more about contractor bonds in North Dakota? Look for your question in the sections below, or simply call us at (877)-514-5146!
Questions about Contractor License Bonds in North Dakota
Which contractor classifications require a contractor license bond?
Water well contractors across North Dakota are required to get bonded, while the city of Grand Forks has a bonding requirement for the following contractor classifications:
- Sign Hanger
How much does a North Dakota contractor bond cost?
Contractor license bond amounts in North Dakota are relatively low compared to other states. Grand Forks moving contractors need a $1,000 bond, all other contractors need a $5,000 bond, and water well contractors– a bond of $15,000.
These amounts refer to the penal sum of the bond, i.e. the maximum a contractor can be liable for if they violate the terms of their bond. To find out your actual cost, you should submit an application. Or, you can get a rough estimate from the table below:
|Bond Type||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Grand Forks Building, Excavator, Mechanical, Plumbing and Sign Hanger Contractor Bonds||$1,000||$100||$100||$100||$100|
|Grand Forks Building, Excavator, Mechanical, Plumbing and Sign Hanger Contractor Bonds||$5,000||$100||$100-$150||$150-$250||$250-$500|
|Water Well Contractor Bond||$15,000||$125-$250||$150-$450||$375-$750||$750-$1,500|
As you can see, your personal credit score is very important for your surety application. The reason is simple: bonding companies assume minimum risk for each bond. Your score is taken as a way to measure that risk, so the lower it is, the higher your premium.
To learn more on the topic, check out our surety bond cost page.
What if my credit score is very low?
A low credit score will affect your premium, and it can go as high as 10%. However, credit score alone won’t stop you from getting bonded, unless it’s in combinations with other red flags in your credit report such as an open bankruptcy or late child support payments.
In 99% of cases, applicants successfully get bonded through our bad credit surety bonds program, without the need for co-signers or posting collateral. Moreover, our agents can help you with your application so you can get as low a premium as possible.
What is the application process like?
To get your North Dakota contractor bond, all you have to do is submit our online application. Our agents will contact you with your personal bond quote. We have the necessary bond forms on file, and we even do most of the paperwork for you, to save you time and hassle.
What else should you expect? It’s a standard practice to sign an indemnity agreement with the bonding company, which is its guarantee that it will receive compensation in case it has to cover a claim for you.
After we’ve processed all of the paperwork, your bond will be issued in as little as one or two business days. For any questions, you can always consult our experts at (877)-514-5146.
How are claims handled?
You should make sure you are aware of all laws, rules and regulations that apply to your trade, and to the particular project you are working on. Otherwise, you risk becoming liable for sums up to the total amount of your surety bond.
For Grand Forks contractors, you can find specific information on the city’s website. As for water well contractors, the bond form states that you need to comply with the provision of North Dakota Century Code Chapter 43-35.
If you are notified of a valid claim, you will be given a timeframe within which you must pay the claim, or you risk getting into a lawsuit with your surety. However, if you’re certain the claim has no valid ground, you can provide proof to your surety and get legal assistance from them.