North Dakota Surety Bonds

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Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your North Dakota surety bond needs.


Required Surety Bonds in North Dakota

Typical North Dakota bonds include (click on any for more info):

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Required Surety Bonds in North Dakota

All surety bonds issued in North Dakota fall into one of these three broad classifications: construction and contractor bonds, license and permit bonds, or court bonds.

North Dakota Construction & Contractor Bonds

Under North Dakota’s “Little Miller Act,” contractors on public works projects with a total value over $100,000 must purchase a performance bond to protect the project owner in the event of non-completion. A payment bond is also required to protect suppliers, subcontractors, and laborers. Municipal and county public works projects may also require performance and/or payment bonds.

North Dakota License & Permit Bonds

In North Dakota, some occupational and business licenses are issued by the state’s Attorney General (e.g., liquor licenses and tobacco licenses), while others are issued by the Secretary of State (e.g., contractors and notaries public) and a variety of boards and commissions. Often, the licensing process involves purchasing a license and permit surety bond. Local governments may have their own licensing and bonding requirements.

North Dakota Court Bonds

North Dakota courts may require two different types of surety bonds: appeal bonds and probate bonds. As the name suggests, an appeal bond is sometimes required from parties appealing court decisions. Probate bonds are required from individuals appointed by the court to manage the assets of another person, such as an executor of an estate or guardian of a minor.

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Frequently Asked Questions

There are three parties to every surety bond agreement, which is a legally binding contract:

  • The “obligee” is the state or local agency requiring the surety bond.
  • The “principal” is the party required to purchase the bond.
  • The “surety” is the company underwriting and issuing the bond.
  • The obligee sets the required amount of the bond, which is the maximum amount that will be paid out on a claim. The obligee also spells out the conduct required of the principal in order to avoid claims against the surety bond.

Any party who suffers a financial loss because the principal has violated the terms of the bond has the right to file a claim against the bond. The principal is solely responsible for paying all valid claims.

However, the surety will often pay a claim and wait to be reimbursed by the principal. This ensures timely settlement of the claim and gives the principal some time to gather the necessary funds.

What the principal in a bond agreement actually pays for a surety bond is a small percentage of the required bond amount established by the obligee. That percentage, known as the premium rate, is determined by the surety company based on the applicant’s credit score and other indicators of the likelihood of claims being filed against the bond. Those with good credit can expect a rate of 1-3%. Those with poorer credit may pay a higher premium.
No claim against a bond will be paid until the surety company has investigated and determined that it is valid. After making payment to a claimant, the surety company will demand reimbursement from the principal.