Minnesota Water Conditioning Contractor Bond

February 16, 2021

Minnesota Water Conditioning Contractor Bond

This guide provides information for insurance agents to help Water Conditioning Contractors on Minnesota Water Conditioning Contractor Bonds

At a Glance:

  • Average Cost: $100 per year
  • Bond Amount: $3,000
  • Who Needs It: All individuals and business entities seeking to obtain a Water Conditioning Contractor License 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 Water Conditioning Contractors in Minnesota: The Minnesota Department of Labor and Industry (MDLI)

Background

Minnesota Administrative Rule 326B.55 requires water conditioning contractors operating in the state to obtain a license with the MDLI. The Minnesota legislature enacted 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, water conditioning contractors in Minnesota must purchase and maintain a $3,000 Water Conditioning Contractor Surety Bond to be eligible for licensure.

What is the Purpose of the Minnesota Water Conditioning Contractor Bond?

Minnesota requires contractors to purchase the Water Conditioning Contractor Bond as part of the application process to obtain a Water Conditioning 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.

Minnesota Water Conditioning Contractor Bond Form

Minnesota Water Conditioning Contractor Bond Form

How Can an Insurance Agent Obtain a Minnesota Water Conditioning Contractor Surety Bond?

BondExchange makes obtaining a Minnesota Water Conditioning 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 Water Conditioning Contractor Surety Bond?

No, a credit check is not required for the Minnesota Water Conditioning Contractor Bond. Because this bond is considered relatively low-risk, the same low rate is offered to all water conditioning contractors in Minnesota.

How Much Does the Minnesota Water Conditioning Contractor Surety Bond Cost?

The $3,000 Minnesota Water Conditioning Contractor surety bond costs just $100 per year

How Does Minnesota Define “Water Conditioning Contractor”?

The MDLI defines “water conditioning contractor” as any person who installs or repairs water conditioning systems as an independent business.

How do Water Conditioning Contractors Apply for a License in Minnesota?

Contractors in Minnesota must navigate several steps to secure their Water Conditioning Contractor License. Below are the general guidelines, but contractors should refer to the application form for details on the process.

License Period – The Minnesota Water Conditioning Contractor License expires on December 31 of the year after the license is first issued, and then every two years from then on. All licenses must be renewed before the expiration date.

Step 1 – Start a Business

Contractors must create a business entity and register with the Minnesota Secretary of State prior to submitting their license application

Step 2 – Obtain a Water Conditioning Master License

Contractors must employ at least one individual who has an active master water conditioning master license and who has the necessary training and expertise to handle the day to day operations of the contracting business. To obtain a master license, individuals must complete the license application and pay a $50 application fee. After submitting the application, the individual will receive instructions on how to register for the required licensure exam. To be eligible for the Water Conditioning Master License, individuals must be licensed as a water conditioning journey worker for at least one year, as well as have the minimum number of practical experience in the following areas:

    • Installation: 200 hours
    • Servicing: 300 hours
    • Planning: 250 hours
    • Supervising: 250 hours

Step 3 – Purchase Insurance

Water conditioning contractors must purchase liability insurance with with the following minimum limits:

    • $50,000 per person
    • $100,000 per occurrence
    • $10,000 for property damage

Contractors with employees must also purchase workers’ compensation insurance

Step 4 – Purchase a Surety Bond

Contractors must purchase and maintain a $3,000 water conditioning contractor surety bond

Step 5 – Complete the Application

All new contractor regulatory license applications should be completed online. Completed applications should include the following items:

    • Secretary of State registration Status
    • Business Type
      • Individual Proprietor (IP)
      • Corporation (CORP)
      • Limited Liability Company (LLC)
      • Partnership (PT)
      • Limited Liability Partnership (LLP)
      • Foreign Corporation
      • Other (specify)
    • FEIN
    • Tax ID Number
    • SSN
    • Business Information
      • Name of Contractor
      • DBA Name
      • Physical Street Address
      • Mailing Address
      • Phone Number
      • Email Address
    • Out Of State Business Status
      • Registered Agent Name
      • Registered Agents Minnesota Address
      • Phone Number
      • Telephone Number
      • Email Address
    • Employee Status
      • Unemployment Insurance Number
    • Master Water Conditioning License Number
    • Personal Information
      • Full Legal Name
      • Address
      • Phone Number
      • Email Address
    • $128 Application Fee

How Does a Minnesota Water Conditioning Contractor Renew Their License?

Contractors can renew their license online here. The Minnesota Water Conditioning Contractor License expires on December 31 of the year after the license is first issued, and then every two years from then on. All licenses must be renewed before the expiration date.

What Are the Insurance Requirements for the Minnesota Water Conditioning Contractor License?

The State of Minnesota requires water conditioning contractors to obtain liability insurance with the following minimum limits:

  • $50,000 per person
  • $100,000 per occurrence
  • $10,000 for property damage

Contractors with employees must also obtain workers’ compensation insurance. All water conditioning contractors must purchase and maintain a $3,000 Water Conditioning Contractor Bond.

How Do Minnesota Water Conditioning Contractors File Their Bond?

Contractors should should submit their completed bond form, including the power of attorney, online along with their license application. The Water Conditioning 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 is signed and sealed

What Can Contractors Do to Avoid Claims Against the Minnesota Water Conditioning Contractor Bond?

To avoid claims on the Water Conditioning Contractor 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 Water Conditioning Contractors in Minnesota?

Minnesota requires water conditioning 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 Water Conditioning Contractor  Customers?

Minnesota conveniently provides a public database to search for active water conditioning 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.

2021-12-28T15:22:19-05:00