Winston-Salem Excavation Bond: A Comprehensive Guide

June 20, 2022

Winston-Salem Excavation Bond

This guide provides information for insurance agents to help their customers obtain a Winston-Salem Excavation 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: Between 0.5% to 5% of the bond amount based on the applicant’s credit history
  • Bond Amount: Minimum of $25,000 (more on this later)
  • Who Needs it: Contractors excavating any city street, sidewalk, alley, or other public places in Winston-Salem, North Carolina
  • Purpose: To ensure the city will receive compensation for financial harm if the contractor fails to pay all required fees or restore the job site to a safe condition
  • Who Regulates Excavation Contractors in Winston-Salem: The Winston-Salem Streets Department

Background

Winston-Salem Code of Ordinances 74-131 requires all contractors excavating any public infrastructure to obtain a permit before beginning work on the job. The Winston-Salem City Council enacted the permit requirement to ensure that contractors engage in ethical business practices. To provide financial security for the enforcement of the permitting requirement, excavation contractors must purchase a surety bond to be eligible for a permit.

What is the Purpose of the Winston-Salem Excavation Bond?

Winston-Salem requires excavation contractors to purchase a surety bond as part of the application process to obtain a permit. 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 74-132. Specifically, the bond protects the public if the contractor fails to pay all required fees or does not restore the job site to a safe condition. In short, the bond is a type of insurance that protects the public if the contractor violates the terms of their permit.

Winston-Salem Excavation Bond

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

BondExchange makes obtaining a Winston-Salem Excavation 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 74-132 grants the city the authority to set the bond amount on a case-by-case basis, provided however that no excavation bonds are less than $25,000. When determining the required bond amount, the city will examine factors such as the scope of the project and its estimated cost.

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

Surety companies will run a credit check on the permit applicant to determine eligibility and pricing for the Winston-Salem Excavation bond. Applicants with excellent credit and work experience can expect to receive the best rates. Applicants 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 applicant’s credit.

How Much Does the Winston-Salem Excavation Bond Cost?

The Winston-Salem Excavation 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 bond cost on a $25,000 bond requirement.

$100,000 Blasting Contractor Bond Cost

Credit Score Bond Cost (1 year)
625+ $125
600 – 624 $375
550 – 599 $625
525 – 549 $750
500 – 524 $1,250

*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 seeking to excavate, or otherwise perform work bringing about hazardous conditions, any portion of public infrastructure to purchase a surety bond as a prerequisite to obtaining a permit.

Public utility companies are exempt from the bonding requirement.

How do Contractors Apply For an Excavation Permit in Winston-Salem?

Contractors in Winston-Salem must navigate several steps to obtain an excavation permit. Below are the general guidelines, but contractors should refer to the permitting statutes for details on the process.

Step 1 – Contact the City

To obtain an excavation permit, contractors should contact the city’s Streets Department. The department 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 Streets Department has reviewed the contractor’s application, they will set the required bond amount. Contractors must purchase and maintain a surety bond before being issued an excavation permit.

Do Contractors in Winston-Salem Need to Renew Their Excavation Permits?

No, Winston-Salem Excavation permits are valid for the duration of the project. However, contractors will need to apply for a new permit for each project they wish to undertake. Additionally, contractors must begin work by the date specified on the permit or else it will expire.

What are the Insurance Requirements for Winston-Salem Excavation Permits?

Winston-Salem does not require contractors to purchase liability insurance as a prerequisite to obtaining an excavation permit. However, general contractors licensed by the state of North Carolina must purchase workers’ compensation insurance and contractor license bond. Excavation contractors must purchase a surety bond for every project they undertake.

How Do Winston-Salem Excavation 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 Excavation Contractors Do To Avoid Bond Claims?

To avoid claims on their bonds, excavation contractors in Winston-Salem must adhere to the terms of their permits, including some of the most important issues below that tend to cause claims:

  • Pay all required fees
  • Do not abandon a job
  • Restore all excavated sites to safe conditions

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

Most reputable excavation 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 Excavation Contractor Customers?

To obtain a list of active excavation permits in the city, we suggest contacting the streets department. Additionally, North Carolina conveniently provides a public database.to search for active general contractors in the state. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

2022-06-20T17:08:51-04:00