Maryland Sewage Sludge Utilization Performance Bond: A Comprehensive Guide

February 11, 2021

This guide provides information for insurance agents to help Sludge Utilization Permit Holders on Maryland Sewage Sludge Utilization Performance Bonds

At a Glance:

• Average Cost: Between 1.5% to 7.5% of the bond amount based on the contractor’s credit
• Bond Amount: Is determined by the proposed utilization of the sewage sludge
  • $10,000 for transportation or marketing
  • $30,000 for land application on agricultural land
  • $50,000 for land application on marginal land
  • $75,000 for innovative project
  • $125,000 for in-State sewage sludge treatment, composting, storage, or distribution facility
• Who Needs It: All individuals and business entities seeking to obtain a Sewage Sludge Utilization Permit in the State of Maryland
• Purpose: Provides assurance to the project owner if a contractor fails to complete the work specified in the contract and within the allotted time frame.
• Who Regulates Sewage Sludge Utilization Permit Holders in Maryland: The Maryland Department of the Environment (MDE)

Background

Maryland Code Regulations Section 26.04.06.01 requires contractors seeking to utilize sewage sludge to obtain a sewage sludge utilization permit with the MDE. The Maryland legislature enacted permitting laws and regulations to ensure that sludge utilization contractors engage in ethical business practices. In order to provide financial security for the enforcement of the permit law, sludge utilization permittees must purchase and maintain a Maryland Sewage Sludge Utilization Performance surety bond to be eligible for licensure.

What is the Purpose of the Maryland Sewage Sludge Utilization Performance Bond?

Maryland requires contractors to purchase the Maryland Sewage Sludge Utilization Performance Bond as part of the application process to obtain a sewage sludge utilization permit in the State of Maryland. The bond ensures that the public will receive compensation for financial harm if the permit holder fails to comply with permitting regulations. In short, the bond is a type of insurance that protects the public if the permit holder breaks permitting laws.

How Can an Insurance Agent Obtain a Maryland Sewage Sludge Utilization Performance Surety Bond?

BondExchange makes obtaining a Maryland Sewage Sludge Utilization Performance Bond easy. Simply login to your account and use our keyword search to find the “contractor” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

Is a Credit Check Required for the Maryland Sewage Sludge Utilization Performance Bond?

Surety companies will run a credit check on the permit applicant company to determine eligibility and pricing for the Maryland Sewage Sludge Utilization Performance Bond. Permittees with excellent credit and work experience can expect to receive the best rates. Permittees with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the applicant’s credit.

How Much Does the Maryland Sludge Utilization Performance Bond Cost?

The Maryland Sludge Utilization Performance surety bond can cost anywhere between 1.5% to 7.5% of the bond amount. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. We also offer easy interest-free financing for premiums over $500. The chart below offers a quick reference for the approximate bond cost on the varying amount bond requirement for the Maryland Sludge Utilization Performance Bond Cost

$75,000 Sewage Sludge Utilization Performance Bond

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

How Does Maryland Define “Sewage Sludge Utilization”?

The Maryland Department of the Environment defines sewage sludge utilization as using sewage sludge for any of the following purposes; “Treatment, composting, transportation, storage, distribution, application on agricultural land or marginal land, energy generation or incineration, marketing, conducting innovative or research projects, or disposal or alternative utilization at a municipal landfill.”

Contractors Apply for a Sewage Sludge Utilization Permit in Maryland?

Contractors in Maryland must navigate several steps to secure their sewage sludge utilization permit. Below are the general guidelines, but contractors should refer to the permit description form for details on the process.

Permit Period – The Maryland sewage sludge utilization permit is valid for no longer than 5 years, but may expire sooner if the contractor completes their project

Step 1 – Purchase a Surety Bond

Contractors must purchase and maintain a Sludge Utilization Performance Bond with the limit determined by the proposed utilization of the sewage sludge:

• • $10,000 for transportation or marketing
  • $30,000 for land application on agricultural land
  • $50,000 for land application on marginal land
  • $75,000 for innovative project
  • $125,000 for in-State sewage sludge treatment, composting, storage, or distribution facility

Step 2 – Purchase Insurance

Contractors with employees must purchase and maintain workers’ compensation insurance

Step 3 – Complete the Application

All regulatory permit applications should be sent to the following address:

Maryland Department of the Environment
1800 Washington Blvd., Suite 610
Baltimore, MD 21230-1719

Contractors will need to send a photocopy of their application and all permitting fees to a separate address listed below:

Maryland Department of the Environment
P.O. Box 1417
Baltimore, MD 21203-1417

Contractors can find all permit application ancillary forms here.

Step 4 – Pay the Appropriate Fees

Contractors must pay the appropriate fee(s) corresponding to their specific reason for sludge utilization.

• • Application to agricultural land: $175.00
  • Application to marginal land: $350.00
  • Transportation (out-of-State, to another WWTP, or to a municipal landfill): $45.00
  • Disposal at a municipal landfill: $350.00
  • Energy Generation or Incineration: $750.00
  • Research project: $25.00
  • Innovative project: $750.00
  • Treatment Facility: $350.00
  • Composting Facility: $350.00
  • Marketing (distribution in Maryland of out-of-State Cass A sewage sludge): $750.00
  • Storage (to construct and operate a structure for permanent storage): $350.00
  • Distribution Facility: $750.00

How Do Maryland Sludge Utilization Permit Holders Renew Their Permit?

For projects lasting longer than 5 years, contractors will need to mail a renewal application, including the appropriate fee(s) outlined in Step 4, to the following address:

Maryland Department of the Environment
1800 Washington Blvd., Suite 610
Baltimore, MD 21230-1719

What Are the Insurance Requirements for the Maryland Sludge Utilization Permit?

The State of Maryland requires sewer sludge utilization contractors who have employees to obtain worker’s compensation insurance. In addition, permit holders must purchase a Maryland Sewage Sludge Utilization Performance in bond with limits outlined in Step 1.

How Do Sewage Sludge Utilization Permit Holders File Their Bond With The Maryland MDE?

Contractors should mail the completed bond form, including the power of attorney, to the following address:

Maryland Department of the Environment
1800 Washington Blvd., Suite 610
Baltimore, MD 21230-1719

The Sludge Utilization Performance surety bond requires signatures from both the surety company and the contractor. The surety company should include the following information on the bond form:

• Legal name and address of the entity/individual(s) buying the bond
• Surety company’s name and address
• Bond amount
• Bond Term
• Date the bond is signed
• Witness signatures
• Notary signatures

How Can Maryland Sludge Utilization Licensors Avoid Bond Claims?

To avoid claims on the Maryland Sewage Sludge Utilization Performance Bond, contractors must follow all permit regulations in the state.

What Other Insurance Products Can Agents Offer Sludge Utilization Permit Holders in Maryland?

Maryland does not require sewage sludge utilization permit holders to obtain any form of liability insurance. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue any form of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Sewage Sludge Utilization Permit Holder Customers?

Maryland conveniently provides a public database to search for active sewage sludge utilization permit holders in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.