Minnesota Sign Contractor Bond: A Comprehensive Guide
February 16, 2021
This guide provides information for insurance agents to help Sign Contractors on Minnesota Sign Contractor Bonds
At a Glance:
- Average Cost: $100 per year
- Bond Amount: $8,000
- Who Needs It: All sign contractors operating in the State of Minnesota
- Purpose: To ensure the public will receive compensation for any damages should the contractor fail to honor contractual agreements
- Who Regulates Sign Contractors in Minnesota: The Minnesota Department of Labor and Industry (MDLI) requires sign contractors to purchase a bond. However, contractors will need to adhere to local licensing guidelines in the municipalities where they conduct business
Background
Minnesota Administrative Rules 326B.865 requires sign contractors to purchase a surety bond prior to conducting business operations. The Minnesota legislature enacted the bonding requirement to ensure that contractors engage in ethical business practices. There is no state licensing licensing requirement for sign contractors. However, contractors will need to follow all local licensing guidelines in the municipalities where they conduct business.
What is the Purpose of the Minnesota Sign Contractor Bond?
Minnesota requires contractors to purchase the Sign Contractor Bond prior to conducting business operations. The bond ensures that the public will receive compensation for financial harm if the contractor fails to honor contractual agreements. In short, the bond is a type of insurance that protects the public if the contractor acts unethically.
How Can an Insurance Agent Obtain a Minnesota Sign Contractor Surety Bond?
BondExchange makes obtaining a Minnesota Sign Contractor 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 Minnesota Sign Contractor Surety Bond?
No, a credit check is not required for the Minnesota Sign Contractor Bond. Because this bond is considered relatively low-risk, the same low rate is offered to all sign contractors in Minnesota.
How Much Does the Minnesota Sign Contractor Surety Bond Cost?
The $8,000 Minnesota Sign Contractor surety bond costs just $100 per year
How Does Minnesota Define “Sign Contractor”?
Minnesota Statute 326B.865 C defines a sign contractor as any independent business who performs contract work on any “device, structure, fixture, or placard using graphics, symbols, or written copy that is erected on the premises of an establishment including the name of the establishment or identifying the merchandise, services, activities, or entertainment available on the premises.”
Do Sign Contractors Need to Obtain a License in Minnesota?
Minnesota does not require sign contractors to obtain a state-level license. However, contractors must complete a business registration application and submit it when filing their bond. Certain municipalities may require sign contractors to obtain a license, so contractors should check with their local licensing authority prior to conducting business operations.
What Are the Insurance Requirements for Minnesota Sign Contractors?
The State of Minnesota does not require sign contractors to obtain any form of liability insurance. Contractors with employees must obtain workers’ compensation insurance. Sign contractors applying for a city license must purchase and maintain an $8,000 surety bond.
How Do Minnesota Sign Contractors File Their Bond?
Contractors should mail their completed bond form, including power of attorney, to the following address:
Construction Codes and Licensing Division
Licensing and Certification Services
443 Lafayette Road North
PO Box 64217
St. Paul, MN 55155
Contractors must also submit a business registration application, including a $100 filing fee, with their bond. The bond is valid for two years from the date of submission and must be renewed prior to the expiration date.
The Sign Contractor 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, address, and phone number of the entity/individual(s) buying the bond
- Surety company’s name, address, and phone number
- Date the bond goes into effect
- Date the bond expires
- Date the bond is signed and sealed
What Can Contractors Do to Avoid Claims Against the Minnesota Sign Contractor Bond?
To avoid claims on the Sign Contractor Bond, contractors must adhere to all bond provisions, including some of the most important issues below that tend to cause claims:
- Do not engage in any acts of fraud
- Honor all contractual agreements
What Other Insurance Products Can Agents Offer Sign Contractors in Minnesota?
Minnesota does not require sign contractors to obtain any form of liability insurance. However, most reputable contractors will seek to obtain this insurance anyway. Contractors with employees will need to purchase workers’ compensation insurance. Bonds are our only business at BondExchange, so we do not issue any form of liability 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 Minnesota Sign Contractor Customers?
Minnesota conveniently provides a public database to search for active sign contractors 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.
