Who this applies to
A Minnesota contractor license does not by itself mean a bond. Residential building contractors and remodelers are licensed by the Department of Labor and Industry (DLI) [1] without one, and they pay into the Contractor Recovery Fund instead [6]. Bonds belong to particular trades, set out in separate sections of chapter 326B, including these:
- Plumbing: a bond in the penal sum of at least $25,000 [3], required of each person who performs or offers to perform plumbing work in the state. It is a condition of holding a plumbing contractor license and also reaches anyone installing sewer or water service without a contractor's license [3].
- Electrical: $25,000 as a condition of licensing for electrical contractors, in a bond that complies with section 326B.0921 [4].
- Gas, heating, ventilation, cooling, air conditioning, fuel burning and refrigeration: $25,000 for all work entered into within the state, from anyone contracting to do that work [5].
- Residential roofers: at least $15,000 [2].
- Manufactured home installers: at least $2,500 [2].
Section 326B.86, headed "Bond; insurance", sits among the residential contractor licensing sections, 326B.801 to 326B.89 [2]. Even so, it names only residential roofers and manufactured home installers, and residential building contractors and remodelers are not among them.
What the rule says
These five bonds come from four sections, and the wording is not uniform. The plumbing section sets a penal sum of at least $25,000 [3], and section 326B.86 uses the same "at least" language for roofers and manufactured home installers [2], so those three figures are floors. The electrical subdivision states a penal sum of $25,000 with no such qualifier [4], and section 326B.197 fixes $25,000 for all work entered into within the state [5].
How to comply
For residential building contractors and remodelers, the Recovery Fund takes the place of a bond. Licensees pay into it at licensing and renewal, on a fee tiered by gross annual receipts: $320 under $1 million, $420 from $1 million to $5 million and $520 over $5 million [6]. An assessment of up to $200 is added if the fund balance falls [6]. In return the fund compensates owners up to $100,000 per claim against one licensee and $550,000 per licensee in total [6].
For the bonded trades:
- Each bond runs to the State of Minnesota. The roofer and installer bonds are filed with the commissioner of labor and industry [2], and so is the HVAC bond, which must also come from a corporate surety licensed in Minnesota [5].
- The plumbing provision [3] and the electrical one [4] both require the contractor to give and maintain the bond.
- DLI's Construction Codes and Licensing Division is the licensing agency; its site is dli.mn.gov.
- Local licenses fall under a separate provision, section 326B.835 [7].
Current amounts and fees are DLI's to confirm, with the statute text in the Sources as the reference.
Related
- Contractor license bond cost calculator, to estimate what carrying one of these bonds costs.
- All states' bond requirements, gathered in one table.