Minnesota Contractor High-Pressure Piping Bond: A Comprehensive Guide
This guide provides information for insurance agents to help contractors on Minnesota Contractor High Pressure Piping Bonds
At a Glance:
- Average Cost: $150 per year or $15 per month
- Bond Amount: $15,000
- Who Needs It: All high pressure pipefitter (HPP) contractors in the State of Minnesota
- Purpose: To ensure the public will receive compensation for any damages should the contractor fail to comply with contractor licensing law
- Who Regulates High Pressure Piping Contractors in Minnesota: The Minnesota Department of Labor and Industry (MDLI)
Background
Minnesota Administrative Rule 326B.33 requires HPP contractors operating in the state to obtain a license with the MDLI. The Minnesota 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 $15,000 contractor high pressure piping surety bond to be eligible for licensure.
What is the Purpose of the Minnesota Contractor High Pressure Piping Bond?
Minnesota requires HPP contractors to purchase the contractor high pressure piping bond as part of the application process to obtain an HPP Contractor License. The bond ensures that the public will receive compensation for financial harm if the contractor fails to comply with 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 Minnesota Contractor High Pressure Piping Surety Bond?
BondExchange makes obtaining a Minnesota Contractor High Pressure Piping 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? Gain access 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.
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Is a Credit Check Required for the Minnesota Contractor High Pressure Piping Surety Bond?
No, a credit check is not required for the Minnesota Contractor High Pressure Piping Bond. Because this bond is considered relatively low-risk, the same low rate is offered to all HPP contractors in Minnesota.
How Much Does the Minnesota Contractor High Pressure Piping Surety Bond Cost?
The $15,000 Minnesota Contractor High Pressure Piping surety bond costs either $150 per year or $15 per month.
How Does Minnesota Define “High Pressure Piping System”?
The Minnesota DLI defines a high pressure piping system as any of the following:
- Steam-system piping designed to operate at more than 15 p.s.i (pounds per square inch),
- High-pressure and high-temperature fluids designed to operate at more than 250 degrees Fahrenheit and 30 p.s.i. gauge used for heating,
- Ammonia (717) refrigeration-system piping, and
- Bioprocess piping systems
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do HPP Contractors Apply for a License in Minnesota?
Contractors in Minnesota must navigate several steps to secure their HPP Contractor License. Below are the general guidelines, but contractors should refer to the application form for details on the process.
License Period – The Minnesota HPP Contractor license expires on December 31 of each year and must be renewed before the expiration date
Step 1 – Obtain a Master License
Contractors must employ at least one individual has an active Master Pipefitter License. To obtain a Master Pipefitter License, individuals must complete the application, and pass the required licensure exam. All Master Pipefitter license applicants must:
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- Be at least 21 years of age;
- Be able to read and comprehend blueprints, specifications, and terms of contracts, and to compute the cost of installing high pressure piping and equipment;
- Have worked at the trade of high pressure pipefitting for at least five years;
- Complete and submit the High Pressure Piping Work Experience Verification Form.
- Pay the examination fee and pass the required examination with a weighted score of at least 70 out of 100. The Exam guide can be found here.
Step 2 – Purchase Insurance
HPP Contractors must purchase liability insurance with the following minimum limits:
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- $100,000 per person
- $300,000 per occurrence
- $50,000 for property damage
Contractors with employees must also purchase workers’ compensation insurance
Step 3 – Purchase a Surety Bond
Contractors must purchase and maintain a $15,000 contractor high pressure piping bond
Step 4 – Complete the Application
All new contractor regulatory license applications and contractor regulatory license renewal applications should be completed online. Completed applications should include the following items:
How Does a Minnesota HPP Contractor Renew Their License?
HPP contractors can renew their license online here. The Minnesota HPP Contractor license expires on December 31 of each year and must be renewed before the expiration date
What Are the Insurance Requirements for the Minnesota HPP Contractor License?
The State of Minnesota requires HPP contractors to obtain liability insurance with the following minimum limits:
- $100,000 per person
- $300,000 per occurrence
- $50,000 for property damage
Contractors with employees must also obtain workers’ compensation insurance. All HPP contractors must purchase and maintain a $15,000 Contractor High Pressure Piping Bond.
How Do Minnesota HPP Contractors File Their Bond?
Contractors should mail the completed bond form, including the power of attorney, to the following address:
Minnesota Department of Labor and Industry
Construction Codes and Licensing Division
Licensing and Certification Services
PO Box 64220
St. Paul, MN
The Contractor High Pressure Piping 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
- License term
- Date the bond is signed and sealed
What Can Contractors Do to Avoid Claims Against the Minnesota Contractor High Pressure Piping Bond?
To avoid claims on the Contractor High Pressure Piping Bond, contractors must follow all license regulations in the state, 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 HPP Contractors in Minnesota?
Minnesota requires HPP contractors to obtain liability insurance. Contractors with employees will also 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 HPP Contractor Customers?
Minnesota conveniently provides a public database to search for active HPP 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.