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North Dakota Contractor License Bond

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What is a North Dakota Contractor License Bond?

Contractors working in the construction industry with customers in North Dakota may be required to hold a license before they are allowed to work on projects. Part of the licensing process involves posting a surety bond, known more commonly as a North Dakota contractor license bond. This bond is meant to protect a contractor’s customers from fraudulent or incomplete work.

Who Needs a North Dakota Contractor License Bond?

Unlike some other states, North Dakota only has a statewide licensing and bonding requirement for a single type of contractor. Water well contractors are required to not only have a license but also to post a surety bond to remain in compliance with state laws.

Local jurisdictions also require construction contractors to have a license and secure a North Dakota contractor license bond. However, these requirements only extend to building, mechanical, plumbing, moving, sign hanger, and excavator contractors working in the city of Grand Forks. To ensure licensing and bonding requirements are met, be sure to check with local licensing authorities before starting work on a project.

North Dakota Contractor License Bond Obligee Details

Surety bonds involve three specific parties in a contractual agreement. The principal of a North Dakota contractor license bond is the contractor responsible to posting a bond. The surety company provides the bond on behalf of the principal, based on the licensing authority requiring a bond to be in place, also known as the obligee of the bond.

For water well contractors, the state obligee for North Dakota contractor license bonds is the Secretary of State. Local licensing authorities are the obligee of other bonding requirements for North Dakota contractors.

How Much Does a North Dakota Contractor License Bond Cost?

Because bond requirements vary for North Dakota contractors, so do the prices of bonds. First, though, it is important to recognize that bonding prices are based on the amount of the bond required to be posted, as well as the credit history of the contractor securing the bond. Bond amounts depend on the type of contractor license you hold. For instance, a water well contractor bond of at least $2,000 must be in place. However, a building, mechanical, or plumbing contractor may require a $5,000 bond.

Contractors do not pay the total bond amount, but instead, pay a percentage, known as the bond premium. The percentage is calculated by the surety company providing the bond, based on the bond total and the credit history of the contractor. In most cases, bond premiums range from 1 to 10% of the bond total. Contractors with bad credit may be approved for a North Dakota contractor license bond, but the bond premium will be on the higher end of that range.

How do You Get a North Dakota Contractor License Bond?

Getting a North Dakota contractor license bond is a simple process. Submit details about the bond amount and type to the surety company, and they will provide a quote for your bond premium. Once the premium is paid, the bond is in place until it is time for renewal, typically one or two years after it is issued.


Frequent Questions

How much does a bond cost?

Pricing is a percentage of the contractor license bond amount that’s required of you, which is based on your personal credit. Use our bond pricing tool to to get a quick ballpark estimate.

Can I get bonded with bad credit?

Yes. You can apply and get bonded with bad credit. Our agency is the largest writer of bonds in the county, which allows us to approve contractors for bonds when other agencies cannot.

Are these the same as contract bonds?

No. Contractor license bonds ensure you will abide by the laws of your state, city or municipality when performing contracting work. Contract bonds guarantee public projects will be completed properly and are a separate bond type. You can learn more about contract surety bonds by visiting the contractor bond center.

Do I need a state or local bond?

It depends on who is requiring the bond of you, the local municipality, county or state. Depending on your location, it is possible you may need both a local and state bond, as contractor license bond requirements can vary drastically. You can select your state to see a full list of contractor license bond requirements.


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