Raleigh Work In Public Streets Bond: A Comprehensive Guide

May 25, 2022

Raleigh Work In Public Streets Bond

This guide provides information for insurance agents to help their customers obtain a Raleigh Work in Public Streets bond

At a Glance:

  • Average Cost: $100 per year (the cost will increase for bonds with limits greater than $25,000)
  • Bond Amount: Minimum of $5,000 (more on this later)
  • Who Needs it: All contractors applying for a permit to perform work in a public right-of-way for at least one year in Raleigh, North Carolina
  • Purpose: To ensure the city will receive compensation for financial harm if the contractor violates the terms of their permit
  • Who Requires the Bond: The City of Raleigh

Background

Raleigh Code of Ordinances 11-6001 requires all contractors seeking to perform work within a public right-of-way to obtain a permit from the city’s Transportation Department. The Raleigh City Council enacted the permit requirement to ensure that construction performed on public right-of-way does not damage the city’s infrastructure or residents’ property. To provide financial security for the enforcement of the permitting requirement, contractors performing work in a public right-of-way for a period of at least one year must purchase a surety bond to be eligible for a permit.

“Right-of-way” refers to the areas in which the public has the legal right to travel across. For example, persons excavating any city streets or sidewalks would need a permit, as they are conducting operations in a public right-of-way.

City Right of Way

What is the Purpose of the Raleigh Work in Public Streets Bond?

Raleigh requires contractors to purchase a surety bond as part of the application process to obtain a permit authorizing them to perform construction activities in a public right-of-way, provided that the project is expected to last at least one year. The bond ensures that the city will receive compensation for financial harm if the contractor fails to abide by the regulations outlined in Raleigh Code of Ordinances 11-6002. Specifically, the bond protects the city if the contractor abandons the job or fails to complete all required repairs to the right-of-way. In short, the bond is a type of insurance that protects the city if the contractor violates the terms of their permit.

Raleigh Work in Public Streets Bond Form

Raleigh Work in Public Streets Bond Form

How Can an Insurance Agent Obtain a Raleigh Work in Public Streets Surety Bond?

BondExchange makes obtaining a Raleigh Work in Public Streets bond easy. Simply log in to your account and use our keyword search to find the “Raleigh” 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 at (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.

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How is the Bond Amount Determined?

Raleigh Code of Ordinances 11-6001 dictates that the bond amount must be a minimum of $5,000 and grants the city the authority to increase the bond amount on a case-by-case basis. When determining the required bond amount, the city will examine the scope of the project and its estimated cost.

Is a Credit Check Required for the Raleigh Work in Public Streets Bond?

A credit check is not required for Raleigh Work in Public Streets bonds with limits of $25,000 or less. Because the bond is considered relatively low risk, the same low rate is offered to all contractors in Raleigh regardless of their credit history.

However, surety companies may conduct credit checks on contractors when the bond limit is more than $20,000. The credit check is a “soft hit”, meaning that the credit check will not affect the applicant’s credit.

How Much Does the Raleigh Work in Public Streets Bond Cost?

The Raleigh Work in Public Streets bond costs just $100. Bonds with limits greater than $25,000 may be more expensive.

Who is Required to Purchase the Bond?

Raleigh requires contractors seeking to perform work in a public right-of-way for a period of at least one year to purchase a surety bond as a prerequisite to obtaining a permit. These bonds are most often required for larger construction projects and contractors that need to close a public right-of-way for less than a year do not need to be bonded.

How do Contractors Apply For a Raleigh Right-of-Way Permit?

Contractors must navigate several steps to obtain a Raleigh Right-of-Way Permit. Below are the general guidelines, but contractors should refer to the city’s Right of Way Services page for details on the process.

Step 1 – Purchase Insurance

Contractors applying for a right-of-way permit must purchase liability insurance, that insures the city and persons separately, with the following minimum limits:

    • $500,000 per person
    • $1,000,000 per accident
    • $500,000 property damage per accident

Step 2 – Complete the Application

All Raleigh Right-Of-Way Permit applications should be completed online in the city’s Permit and Development Portal. Contractors must create an account to access the application. A map/plan of the work to be performed in the right of way must be submitted with the application.

Step 3 – Purchase a Surety Bond

Once the contractor has submitted their application, the city will inform them of their required bond amount. For projects expected to last one year or longer, contractors must purchase and maintain a surety bond.

Do Contractors Need to Renew Their Right-Of-Way Permits?

Contractors may apply to have their right-of-way permits extended if their permits expire before the completion of a job. Additionally, contractors that need multiple permits may apply for an annual right-of-way permit, allowing them to skip parts of the application process for individual jobs. To apply for a permit extension or to renew their annual permit, contractors should contact Right of Way Services.

What are the Insurance Requirements for the Raleigh Right-Of-Way Permit

To be eligible for a Raleigh Right-of-Way permit, contractors must purchase liability insurance, that insures the city and persons separately, with the following minimum limits:

  • $500,000 per person
  • $1,000,000 per accident
  • $500,000 property damage per accident

Contractors working in a public right-of-way for a period of at least one year must purchase and maintain a surety bond with a minimum limit of $5,000.

How Do Your Customers File Their Raleigh Work in Public Streets Bonds?

Your customers should submit their completed bond forms, including the power of attorney, to the following address:

Development Services Customer Service Center
1 Exchange Plaza, Suite 400
Raleigh, NC 27601

The surety bond requires signatures from both the surety company that issues the bond and from the contractor. The surety company should include the following information on the bond form:

  • Legal name and address of entity/individual(s) buying the bond
  • Surety company’s name
  • Bond amount
  • Date the bond goes into effect and expires
  • Date the bond is signed

What Can Your Customers Do to Avoid Claims Against Their Raleigh Work in Public Streets Bonds?

To avoid claims on their Raleigh Work in Public Streets bonds, contractors must adhere to the terms of their permits, including some of the most important issues below that tend to cause claims:

  • Do not abandon the job
  • Make all required repairs to public right-of-ways

What Other Insurance Products Can Agents Offer Raleigh Right-Of-Way Permit Applicants?

Raleigh requires right-of-way permit applicants to purchase liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of 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 Customers in Need of Raleigh Work in Public Street Bonds?

Raleigh conveniently provides a public database of active right-of-way permits in the city. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

2022-06-01T09:37:23-04:00