Rhode Island Underground Utility License Bond: A Comprehensive Guide

January 7th, 2021

This guide provides information for insurance agents to help contractors on Rhode Island Underground Utility License bonds

At a Glance:

• Average Cost: $100 per year
• Bond Amount: $20,000
• Who Needs It: All individuals and businesses seeking to obtain an Underground Utility License in the State of Rhode Island
• Purpose: To ensure the public will receive compensation for any damages should the contractor fail to comply with registration law
• Who Regulates Underground Utility Contractors in Rhode Island: The Rhode Island Contractors’ Registration and Licensing Board (CRLB)

Background

Rhode Island General Law 5-65.3-3 requires underground utility contractors operating in the state to obtain a license with the CRLB. The Rhode Island legislature enacted the licensing laws and regulations to ensure that contractors engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, contractors must purchase and maintain a $20,000 underground utility license surety bond to be eligible for licensure.

What is the Purpose of the Rhode Island Underground Utility License Bond?

South Carolina requires contractors to purchase the Underground Utility License Bond as part of the application process to obtain an underground utility license. The bond ensures that the public will receive compensation for financial harm if the contractor fails to comply with the licensing regulations. In short, the bond is a type of insurance that protects the public if the contractor breaks licensing laws.

How Can an Insurance Agent Obtain a Rhode Island Underground Utility License Surety Bond?

BondExchange makes obtaining a Rhode Island Underground Utility License 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 Rhode Island Underground Utility License Bond?

No, a credit check is not required for the Rhode Island Underground Utility License bond. Because this bond is considered relatively low-risk, the same low rate is offered to all contractors in Rhode Island.

How Much Does the Rhode Island Underground Utility License Bond Cost?

The $20,000 Rhode Island Underground Utility License bond costs just $100 per year

How Does Rhode Island Define “Underground Utility Contractor”?

To paraphrase Rhode Island 5-65.3-2, an underground utility contractor is any business entity who installs, repairs, alters or replaces underground utilities.

How Do Underground Utility Contractors Apply for a License in Rhode Island?

Underground utility contractors in Rhode Island must navigate several steps to secure their underground utility license. Below are the general guidelines, but contractors should refer to the Licensing Statutes for details on the process.

License Period – The Rhode Island Underground Utility License is valid for two years from the date of issuance and must be renewed before the expiration date

Step 1 – Meet the Experience Requirements

Applicants for the underground utility license must demonstrate to the CRLB that they are qualified to perform work as an underground utility contractor. This can include submitting any of the following items with their application:

• • A comprehensive list of the applicant’s prior work experience
  • Prior licenses held
  • References
  • License card/certificate

If the CRLB determines the applicant does not meet the desired qualifications for licensure, the applicant may have their license application rejected.

Step 2 – Purchase Insurance

Rhode Island requires underground utility contractors to purchase liability insurance with a minimum limit of $1,000,000. Contractors with employees will also need to purchase and maintain worker’s compensation insurance.

Step 3 – Purchase a Surety Bond

Contractors must purchase and maintain a $20,000 underground utility license bond

Step 4 – Complete the Application

Contractors can complete their application online here

Step 5 – Pay the Application Fee

Applicants for the underground utility license will need to submit a $200 application fee with their license application

Step 6 – Pass the Exam

After submitting the application, contractors will need to pass an examination prior to receiving their license. Contractors will be able to register for their exam when completing their license application. More information on the licensing exam can be found here.

How Do Rhode Island Underground Utility Contractors Renew Their License?

Underground utility contractors can renew their license online here. The Rhode Island Underground Utility License is valid for two years from the date of issuance and must be renewed before the expiration date.

What Are the Insurance Requirements for Underground Utility Contractors in Rhode Island?

The State of Rhode Island requires underground utility contractors to obtain liability insurance with a minimum limit of $1,000,000. Contractors with employees will also need to purchase worker’s compensation insurance. All underground utility contractors will need to purchase and maintain a $20,000 underground utility license surety bond.

How Do Rhode Island Underground Utility Contractors File Their Bond With The CRLB?

Contractors should submit the completed bond form, including the power of attorney, online through the CRLB’s licensing portal. The underground utility license surety bond requires signatures from both the surety company that issues the bond and the contractor. The surety company should include the following information on the bond form:

• Legal name of the entity/individual(s) buying the bond
• Date the bond is sealed
• Year the contractor’s license expires

What Can Contractors Do to Avoid Claims Against the Rhode Island Underground Utility License Bond?

To avoid claims on the Underground Utility License Bond, contractors must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:

• Indemnify and hold harmless all cities and towns where work is performed from all legal repercussions resulting from actions committed by the contractor
• Do not use improper materials when performing contracted work
• Do not be negligent when performing work

What Other Insurance Products Can Agents Offer Underground Utility Contractors in Rhode Island?

Rhode Island requires underground utility contractors to obtain liability insurance. Contractors with employees will also need to purchase worker’s compensation insurance. Bonds are our only business at BondExchange, so we do not issue 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 Rhode Island Contractor Customers?

Rhode Island conveniently provides a public database to search for active contractors in the state. The database can be accessed on the CRLB’s homepage. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

What other Contractor License Bonds are Required in Rhode Island?

Contractors in Rhode Island will need to obtain specific bonds correlating with their license type. Below are all the different contractor licensing bonds required by the State of Rhode Island:

• Plumbers and Mechanical Permit – $3,000 bond limit
• Blasting License – $50,000 bond limit