North Dakota Surety Bond Overview
Businesses or individuals that apply for a specific license in North Dakota may be required by the state to post a surety bond.
In a similar way, contractors who plan to work on a public or private construction project within the boundaries of the state are often required to obtain a contract bond.
Why is a Surety Bond Required?
The main purpose of a surety bond is to protect the state, in this case North Dakota, and its public against any unlawful practices a business or contractor might engage in. Surety bonds are legal agreements between the following three parties:
- The obligee - the party that requests the bond
- The principal - the party that gets bonded
- The surety - the party which issues the bond and backs it financially
Surety bonds guarantee compliance with the respective regulations and laws on one hand, and on the other - serve as protection for the obligee and the clients of the principal. In case of a violation of the agreed bond conditions by the principal, a claim may arise. The surety will cover the entire claim if its legitimacy is proven, but eventually, it will be up to the principal to provide compensation to cover the existing harms or losses caused to the claimant.
If you want to get an even more detailed understanding of surety bonds, how they work, and why you need one - check our ‘What is a surety bond’ detailed guide!
Types of Surety Bonds in North Dakota
There are three main categories of surety bonds in North Dakota as well. These are:
- License and permit bonds which you need for business licensing purposes
- Contract bonds required for construction contracting purposes
- Court bonds necessary when appearing before a court for a number of reasons
Find out more about each of these in the sections below!
License and Permit Bonds
The main purpose of a license bond is to regulate the business’ practices and ensure their compliance with the respective North Dakota laws. If your business needs to post a license bond, the requirement will be listed as part of your business license checklist. Keep in mind you cannot complete your application without the relevant surety bond.
Auto dealers, freight brokers, notaries, collection agencies, and money transmitters are just a few examples of the list of businesses and individuals that need this type of bond in order to get licensed in North Dakota.
Are you looking for a specific type of bond? Check the table below to see the types of surety bonds in North Dakota, their approximate cost, and how you can apply. If you can’t find the bond you are looking for or have any questions at all, don’t hesitate to give us a call at 866.450.3412.
Find the Bond You Need
The table below contains a list of only the most popular surety bonds. If you can't find yours, fill out our online application and select "Not in the list".
| Freight Broker Bond (BMC-84) | FMCSA | N/A | Apply Now |
| Market Agencies/Dealers Bond | North Dakota Public Services Commission | Roving Grain Buyer's Bond | Apply Now |
| Agricultural (Non-Livestock) Bond | Public Service Commission | Roving Grain Buyer's Bond | Apply Now |
| Contractor License (No P&P Language) Bond | Department of Commerce | License Bond | Apply Now |
| Contractor License Performance & Payment (State) Bond | North Dakota Department of Commerce | Manufactured Home Installer Bond | Apply Now |
| Contractor License Third Party Liability Bond | Public Service Commission | Contractor License Third Party Liability Bond | Apply Now |
| Collection Agency Bond | Dept of Financial Institutions, Consumer Division | Collection Agency | Apply Now |
| Professional Fund Raisers Bond | Secretary of State | Uniform Professional Fundraiser | Apply Now |
| Mortgage Broker (1st & 2nd Mortgages) Bond | Dept of Financial Institutions, Consumer Division | Surety Bond for Money Brokers | Apply Now |
| Mortgage Lender/Banker (1st & 2nd Mort.) Bond | Dept of Financial Institutions, Consumer Division | Mortgage Lender | Apply Now |
| Auto & Mobile Home Dealers (New & Used) Bond | Department of Transportation - Motor Vehicle Divis | Motor Vehicle Dealer | Apply Now |
| Auto & Mobile Home Dealers (New & Used) Bond | Department of Transportation | Mobile Home and Manufactured Home Dealer Bond | Apply Now |
| Auto & Mobile Home Dealers (Used Only, No New) Bond | Department of Transportation - Motor Vehicle Divis | Motor Vehicle Dealer | Apply Now |
| Employment Agencies Bond | Secretary of State | Professional Employer Organization Bond | Apply Now |
| Itinerant Merchants Bond | Attorney General | Transient Merchant | Apply Now |
| Itinerant Merchants Bond | City of Grand Forks | Itinerant Merchants Bond | Apply Now |
| Itinerant Merchants Bond | City of Mandan | Itinerant Merchants Bond | Apply Now |
| Itinerant Merchants Bond | City of Minot | Itinerant Merchants Bond | Apply Now |
| Retail Stores & Service Shops | Consumer Protection & Antitrust Div- Office of AG | Transient Merchant Bond | Apply Now |
| Professional Licenses (All Other) Bond | Consumer Protection & Antitrust Div - Office of AG | Transient Merchant | Apply Now |
| Professional Licenses (All Other) Bond | ND Department of Financial Institutions | Deferred Presentment Service Provider Bond | Apply Now |
| Sales, Use & Consumer Tax Bond | Office of the State Tax Commissioner | Sales and Tax Permit | Apply Now |
| Auctioneer's (Net Proceeds Meet Amount) Bond | Public Service Commission | Auctioneer | Apply Now |
Contract Bonds
Construction bonds are a bond category most frequently required for work on public construction projects.
If you’re a construction contractor in North Dakota, you are very likely to have encountered this requirement. Public projects, especially larger ones, often require general contractors (and some subcontractors) to post several different types of construction bonds, in order to protect the project and make sure it’s completed as stated in the contract. Private project owners also have the right to require construction bonds.
For example, you may need to post a bid bond, so that if you win the contract, you will commit to completing the project or facing a bond claim. Next will come performance and payment bonds, which safeguard against contractor default and ensure all parties involved will be paid on time. Water well contractors in North Dakota are required by the State Water Commission to post a contract bond in order to be allowed to perform their projects within the state.
The City of Grand Forks, on the other hand, has a bonding requirement for a number of contractors: building, mechanical, plumbing, moving, excavator or sign hanger. In that case, the contract bond is a guarantee that the work performed meets the standards of the city.
Court Bonds
If you need to appeal a court judgment in front of a higher instance, a North Dakota court may require you to get an appeal bond first. The bond discourages people from filing frivolous appeals.
Fiduciary bonds are another type of court bonds, which may be required when:
- A probate court appoints you a fiduciary to somebody’s estate or other assets
- A court appoints you a guardian to a minor.
If you have more questions about the bonding process or need any advice about which bond you need, simply call us at 866.450.3412 to speak to one of our experts!
How Much Does a North Dakota Surety Bond Cost?
Every surety bond has a total bond amount, pertaining to the maximum sum you may have to pay in case of a successful claim. The total bond amount is set by the state for each type of surety bond.
Keep in mind that your actual bond cost is not the same as the full bond amount. What you will be paying on a regular basis, usually annually or biannually, is a premium or a percentage of the total amount.
The bond premium is set by the surety bond company, and is different for each applicant. After an evaluation of the applicant’s credit score and history, the surety underwriter decides whether they are low-risk or high-risk, and sets the premium accordingly.
What Determines Your Final Bond Cost?
The credit score is the main factor that sureties take into account for calculating the bond premium. Standard market rates are between 1% and 4% of the total bond amount for applicants with a high credit score. Bad credit, on the other hand, can elevate premiums up to 15% of the total bond amount. Sureties can also evaluate other factors as well, such as:
- Personal finances
- Business finances
- Industry experience
Want to get a more specific idea of your final bond cost? Use our bond cost calculator and get an estimate of your premium, based on the type of bond you need and personal credit score. If you want to learn more about which factors play a role in determining your bond premium vsit our Surety Bond Cost page for more information.
Surety Bond Cost Calculator
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Get a free exact quote Get another estimateIf you’re worried about your credit score, Bryant Surety Bonds offers our Bad Credit Program. We’ll do everything we can to get you the bond you need at the best price available to you. And no matter what, all our bonds come from the same top-quality surety companies.
How to Get Bonded in North Dakota?
Once you have all the information you need, you can easily apply for a North Dakota surety bond through our online application.
Submitting your application takes no more than a few minutes, We will contact you and ask you to provide all the documentation we need. Once the bond underwriter issues your surety bond, we will mail you the original by mail. If you want to keep copies of your bond forms, we can send them to you via fax or email.
As always, if you have trouble with your application or need to have a question answered, call our agents at 866.450.3412.
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