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| Minnesota – Utility Contractor (Individual Permit) Bond |  |
| Minnesota – Utility Contractor (Continuing) Bond | |
Introduction
A Minnesota Utility Contractor is a licensed professional or business authorized to perform utility-related work such as the installation, repair, and maintenance of underground infrastructure—like water, sewer, gas, or telecommunications systems—within the state. These contractors must comply with Minnesota’s construction codes and licensing laws, and are often required to secure a Utility Contractor Bond to ensure legal and ethical performance of their duties. Licensing and oversight are handled by the Minnesota Department of Labor and Industry (DLI).
Explanation: Minnesota Utility Contractor Bond
A Minnesota Utility Contractor Bond is a surety bond required by the Minnesota Department of Labor and Industry (DLI) for individuals or businesses seeking a Utility Contractor License in the state. This bond acts as a financial guarantee that the contractor will comply with all applicable state laws, rules, and regulations governing utility construction work, including installation, repair, and replacement of underground utilities such as water, sewer, gas, and telecommunications systems.
Purpose of the Bond
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Protects the public and government entities from financial loss due to a contractor’s failure to meet legal or contractual obligations.
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Ensures the contractor performs work according to Minnesota Rules Chapter 326B and other relevant statutes.
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Provides a means of compensation to harmed parties in the event of negligence, non-compliance, or substandard work.
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Key Details
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Obligee: Minnesota Department of Labor and Industry
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Principal: The utility contractor
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Surety: The bonding company issuing the financial guarantee
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Bond Amount: Set by the DLI, often based on the contractor’s scope of work or license type
When is the Bond Required?
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Upon initial application for a Utility Contractor License
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At the time of renewal
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When changing business ownership, entity type, or license status
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Step-by-Step Guide to Obtaining a Minnesota Utility Contractor Bond
To obtain a Minnesota Utility Contractor Bond, follow these steps:
Step 1: Determine Licensing Requirements
Identify the specific license you need based on the type of utility work you plan to perform (e.g., plumbing, mechanical, electrical). The Minnesota Department of Labor and Industry (DLI) oversees licensing for various contractor types.
Step 2: Obtain the Required Surety Bond
Most utility contractors are required to file a surety bond with the DLI. This bond must be:
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Written by a corporate surety licensed to do business in Minnesota.
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On a DLI-approved bond form.
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Properly signed and notarized.
Your insurance agent can assist you in obtaining this bond.
Step 3: Complete Additional Application Forms
Depending on your specific contractor type, you may need to complete additional forms, such as:
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Disclosure of business owners, partners, officers, and members.
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Certificate of Compliance with Minnesota Workers’ Compensation Law.
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Certificate of liability insurance.
These forms are available on the DLI website.
Step 4: Submit the Bond and Application
Submit the completed bond and any required forms to the DLI. Submissions can typically be made online through the DLI’s licensing management system or by mail. Be sure to include any applicable fees.
Step 5: Await Approval
Once your application and bond are submitted, the DLI will review your materials. Processing times may vary, so it’s advisable to submit well in advance of when you plan to begin work.
Conclusion
The Minnesota Utility Contractor Bond is a vital licensing requirement that protects the public and ensures contractors follow state regulations and industry standards. By securing this bond, utility contractors demonstrate financial responsibility, legal compliance, and a commitment to safe, professional utility work throughout Minnesota.
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Frequently Asked Questions (FAQs)
Can I use an out-of-state surety company?
No. The bond must be issued by a surety company licensed to operate in Minnesota.
What happens if I don’t obtain the bond?
Without the bond, you cannot legally perform utility contracting work or hold a valid license in Minnesota.
Do I need a new bond for each project?
No. The Minnesota Utility Contractor Bond is tied to your license, not individual projects. One active bond covers all work performed under that license.
Can the bond be transferred to another company or individual?
No. Bonds are non-transferable. A new bond must be obtained if ownership or the legal business structure changes.
What types of contractors typically need this bond?
Contractors working on public or private utility infrastructure, such as water, sewer, gas, or communications systems, generally require this bond.
What if a claim is filed against my bond?
If a valid claim is made (e.g., due to code violations or damages), the surety may pay up to the bond amount. You are legally obligated to repay the surety.
Can I get bonded with bad credit?
Yes, but applicants with lower credit scores may pay higher premiums or be required to provide collateral.