Winston-Salem Construction Contractor Bond: A Comprehensive Guide

June 20, 2022

Winston-Salem Construction Contractor Bond

This guide provides information for insurance agents to help their customers obtain a Winston-Salem Construction Contractor bond

*Important Note: This page focuses exclusively on the bonding requirements for construction contractors in Winston-Salem. However, contractors applying for this bond may need to obtain a North Carolina General Contractor bond as well. To learn more about the NC General Contractor bond, click here

At a Glance:

  • Average Cost: 
    • $20,000 bond: $100 per year
    • $50,000 bond: Between 0.5% to 5% of the bond amount based on the applicant’s credit history
  • Bond Amount:
    • $20,000 for contractors constructing or repairing streets, sidewalks, bridges, etc.
    • $50,000 for projects that involve extensive construction (more on this later)
  • Who Needs it: Contractors operating in Winston Salem, NC that are constructing or repairing public infrastructure such as streets, sidewalks, bridges, culverts, etc.
  • Purpose: To ensure the city will receive compensation for financial harm if the contractor does not do an adequate job or damages any property
  • Who Requires the Bond: The City of Winston-Salem, North Carolina

Background

Winston-Salem Code of Ordinances 74-175 requires all contractors constructing or repairing public infrastructure to obtain a license. The Winston-Salem City Council enacted the licensing requirement to ensure that contractors engage in ethical business practices. To provide financial security for the enforcement of the licensing law, contractors must purchase a surety bond to be eligible for licensure.

What is the Purpose of the Winston-Salem Construction Contractor Bond?

Winston-Salem requires contractors constructing or repairing public infrastructure to purchase a surety bond as part of the application process to obtain a license. The bond ensures that the city will receive compensation for financial harm if the contractor fails to abide by the regulations outlined in Winston-Salem Code of Ordinances 74-176. Specifically, the bond protects the public if the contractor does not do an adequate job or damages any property throughout the course of the project. In short, the bond is a type of insurance that protects the public if the contractor breaks licensing law.

Winston-Salem Construction Contractor Bond Form

Winston-Salem Construction Contractor Bond Form

How Can an Insurance Agent Obtain a Winston-Salem Construction Contractor Surety Bond?

BondExchange makes obtaining a Winston-Salem Construction Contractor bond easy. Simply log in to your account and use our keyword search to find the “Winston-Salem” 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?

Winston Salem Code of Ordinances 74-176 dictates that the bond amount must be either $20,000 or $50,000 based on the size and scope of the project. The statute dictates that contractors will need to purchase the $50,000 bond if their project involves “extensive construction”, and grants the city the sole authority to determine if the project meets this standard.

Is a Credit Check Required for the Winston-Salem Construction Contractor Bond?

Surety companies will run a credit check on the contractor to determine eligibility and pricing for the $50,000 Winston-Salem Construction Contractor bond. Contractors with excellent credit and work experience can expect to receive the best rates. Contractors with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the contractor’s credit.

There is no credit check required for the $20,000 bond.

How Much Does the Winston-Salem Construction Contractor Bond Cost?

The $20,000 Winston-Salem Construction Contractor Bond costs just $100

The $50,000 bond can cost anywhere between 0.5% to 5% of the bond amount. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below offers a quick reference for the cost of the $50,000 bond requirement.

$50,000 Construction Contractor Bond Cost

Credit Score Bond Cost (1 year)
625+ $250
600 – 624 $750
550 – 599 $1,250
525 – 549 $1,500
500 – 524 $2,500

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

Who is Required to Purchase A Winston-Salem Excavation Bond?

Winston-Salem requires contractors performing construction or repair work on streets, bridges, sidewalks, culverts, and other public infrastructure to purchase a surety bond as a prerequisite to obtaining a license.

How do Construction Contractors Apply For a License in Winston-Salem?

Construction contractors in Winston-Salem must navigate several steps to obtain a license. Below are the general guidelines, but contractors should refer to the licensing statutes for details on the process.

Step 1 – Contact the City

To obtain a license permit, construction contractors should contact the city. The city will walk the contractor through the application process, provide them with any documents that must be complete, and answer any questions they may have.

Step 2 – Purchase a Surety Bond

Once the city has reviewed the contractor’s application, they will set the required bond amount. Contractors must purchase and maintain a surety bond before being issued a license.

What are the Insurance Requirements for Winston-Salem Construction Contractors?

Winston-Salem does not require construction contractors to purchase liability insurance as a prerequisite to obtaining a license. However, general contractors licensed by the state of North Carolina must purchase workers’ compensation insurance and contractor license bond. Construction contractors must purchase a surety bond with the following limit:

  • $20,000 for constructors constructing or repairing streets, sidewalks, bridges, etc.
  • $50,000 for projects that involve extensive construction

How Do Winston-Salem Construction Contractors File Their Bonds?

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

City of Winston-Salem
100 E. First Street
Winston-Salem, N.C. 27101

The surety bond requires signatures from both the surety company that issues the bond and 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
  • Date the bond is signed

What Can Winston-Salem Construction Contractors Do To Avoid Bond Claims?

To avoid claims on their bonds, construction contractors in Winston-Salem must follow all license regulations in the city, including some of the most important issues below that tend to cause claims:

  • Do not abandon a job
  • Restore all construction sites to safe conditions
  • Do not damage any property

What Other Insurance Products Can Agents Offer Winston-Salem Construction Contractors?

Most reputable construction contractors will purchase liability insurance. Additionally, state licensed general contractors with employees must purchase workers’ compensation 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 Winston-Salem Construction Contractor Customers?

We suggest contacting Winston-Salem directly to obtain a list of active construction contractors. the streets department. Additionally, North Carolina provides a public database of all licensed general contractors in the state. Agents can also leverage our print-mail relationships for discounted mailing services.

2022-11-30T14:19:06-05:00