North Dakota Contractor License Bond Requirements

There Is No State-Level Contractor Bond

This is the single most misunderstood part of North Dakota contractor licensing. The Secretary of State does not require a surety bond to issue a state contractor license. What the state requires is a Certificate of Liability Insurance — that's an insurance policy, not a bond.

Multiple national surety bond websites list "North Dakota Contractor License Bond" as a requirement, driving confusion. They're either referencing municipal bonds (which are real) or conflating the state's insurance requirement with a bond requirement (which is wrong).

To get your state contractor license through the FirstStop Portal, you need: a registered business entity, WSI verification, and a Certificate of Liability Insurance naming the ND Secretary of State as certificate holder. No bond.

Municipal Bonds Are a Different Story

While the state doesn't require a bond, individual cities absolutely do. And this is where contractors get caught — they obtain their state license, drive to a municipal permit counter, and discover they need a bond they didn't know existed.

Here's what the major cities require:

Grand Forks mandates a $5,000 License and Permit Bond for all building contractors operating within city limits. This is filed with the Department of Building Safety alongside a $65 annual registration fee. No bond, no local registration, no building permits in Grand Forks.

Bismarck requires a $5,000 Contractor License Bond filed with the Building Inspections Division. Concrete contractors working in the city right-of-way face additional requirements — they must complete three supervised trial jobs before their bond is accepted on a continuous basis.

Fargo doesn't require a general contractor bond, but specialty trades face significant bonding: excavators must file a $100,000 bond, and sidewalk builders need a $25,000 bond. These bonds are filed through the City Auditor's Office.

Minot requires a $5,000 Demolition Surety Bond for any contractor performing demolition work within city limits.

Bond Cost vs. Bond Amount

A $5,000 municipal bond doesn't cost $5,000 out of pocket. You pay a surety company an annual premium — typically 1% to 3% of the bond amount. So a $5,000 bond runs roughly $50 to $150 per year. The bond amount represents the maximum payout to the municipality if you violate local code requirements, fail to complete permitted work, or cause damage that the bond covers.

Your credit score, business history, and the surety company you choose all affect the premium. New contractors without established business credit may pay closer to 3%. Established contractors with clean records typically pay 1% or less.

Public Works Bonding Requirements

If you bid on public construction projects (state agencies, political subdivisions, municipalities, school districts), a separate set of bonding rules kicks in under NDCC Title 48.

Public works projects exceeding $100,000 require payment and performance bonds equal to 100% of the contract value. These project-specific bonds guarantee that you'll complete the work and pay your subcontractors and suppliers. They're issued per project, not as a blanket annual bond.

Additionally, before entering any public contract, you must obtain a Tax Clearance from the Office of the State Tax Commissioner (form SFN 59937). This verifies that you've paid all outstanding state income, sales, and use taxes. Without the clearance, no state agency or political subdivision can legally enter a contract with you or issue final payment on an existing one.

Electrical Contractor Bonds

One trade-specific state bond does exist: the North Dakota State Electrical Board requires a $10,000 surety bond from all electrical contracting businesses. This is filed directly with the NDSEB, not the Secretary of State. If you hold a general contractor license and also perform electrical work (which requires a separate Master Electrician license), you need both the NDSEB bond and any applicable municipal bonds.

Planning Your Bond Requirements

The bonds you need depend entirely on where and what type of work you do. A Class D residential remodeler working only in Bismarck needs one $5,000 city bond. A Class A commercial contractor bidding on public projects across Grand Forks, Bismarck, and Fargo might need two $5,000 municipal bonds, a $100,000 excavator bond, and project-specific performance bonds.

Our North Dakota General Contractor License Guide includes a city-by-city bond matrix and a cost estimator worksheet so you can budget accurately before you start.

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