Arkansas Underground Storage Tanks Contractor Bond: A Comprehensive Guide

This guide provides information for insurance agents to help contractors on Arkansas Underground Storage Tanks Contractor bonds

At a Glance:

• Lowest Cost: $100 per year or $10 per month
• Bond Amount: $25,000
• Who Needs It: All individuals and businesses that act as an underground storage tanks contractor in the State of Arkansas
• Purpose: To ensure the public will receive compensation for any damages should the contractor fail to comply with contractor licensing law
• Who Regulates Underground Storage Tank Contractors in Arkansas: The Arkansas Department of Environmental Quality (DEQ)

Background

Arkansas Code 8-7-805 requires underground storage tank contractors operating in the state to obtain an Underground Storage Tank (UST) license with the DEQ. The Arkansas 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 license law, contractors must either obtain a $25,000 irrevocable letter of credit or purchase and maintain a $25,000 underground storage tanks contractor surety bond to be eligible for licensure.

What is the Purpose of the Arkansas Underground Storage Tanks Contractor Bond?

Arkansas requires contractors to purchase the Underground Storage Tanks Contractor Bond as part of the application process for the UST license. The bond ensures that the public will receive compensation for financial harm if the contractor fails to comply with the 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 an Arkansas Underground Storage Tanks Contractor Surety Bond?

BondExchange makes obtaining an Arkansas Underground Storage Tanks 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? 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.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensure 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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Is a Credit Check Required for the Arkansas Underground Storage Tanks Contractor Bond?

No, a credit check is not required for the Arkansas Underground Storage Tanks Contractor bond. Because this bond is considered relatively low-risk, the same low rate is offered to all contractors in Arkansas.

How Much Does the Arkansas Underground Storage Tank Contractor Bond Cost?

The $25,000 Arkansas Underground Storage Tank Contractor Bond costs $100 per year or $10 per month.

How Does Arkansas Define “Underground Storage Tanks Contractor”?

The Arkansas DEQ defines an underground storage tanks contractor as any person or business entity who engages in one or more of the following activities:

• Installs, repairs, closes, or tests a UST system
• Contracts with a third party to install, repair, close, or test a UST system

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 Contractors Apply for an Underground Storage Tank Contractor License in Arkansas?

Contractors in Arkansas must navigate several steps to secure their UST license. Below are the general guidelines, but contractors should refer to the UST licensing page for details on the process.

License Period – The Arkansas UST license is valid for two years from the date of issuance and must be renewed before the expiration date.

Step 1 – Determine the License Type

Arkansas requires contractors to obtain specific licenses corresponding to the nature in which the contractor’s business operates. Below are the different types of the Arkansas UST License.

• • Contractor/Company – Required for all UST contracting and testing companies, as well as the individuals who supervise the work performed by these companies. There are three types of Contractor/Company License:
    • Contractor License – Can install, repair, upgrade or close underground storage tanks
    • Company License – Can test underground storage tests
    • Contractor and Company License – Can perform the actions of both the Contractor and Company Licenses
  • Individual – Works as an independent contractor and not for any contracting or testing company

***The remaining steps will focus on how to obtain the Contractor/Company UST license. The Individual UST License does not have a bond requirement. There are different requirements for the Individual UST License, and contractors seeking to obtain that license can click on the license name to view the specific licensing requirements.***

Step 2 – Purchase a Surety Bond or Obtain a Letter of Credit

Contractors must either purchase and maintain a $25,000 underground storage tanks contractor surety bond or obtain a $25,000 irrevocable letter of credit.

Contractors who choose to obtain an irrevocable letter of credit must submit an Irrevocable Letter of Credit Form with their application.

Step 3 – Complete the Application

All UST regulatory license applications should be mailed to:

ADEQ
Regulated Storage Tanks Division
5301 Northshore Drive
North Little Rock, Arkansas 72118-5317

Contractors must complete the application, including the following steps:

• • 3.a Disclosure Statement – Applicants must fill out the Disclosure Statement in its entirety and submit it with their application. The disclosure statement will contain the following information:
    • Name of all applicants for the license
    • Name of all parent companies and subsidiaries of the applicant and all legal business entities the applicant owns a 5% stake or more in
    • The experience/credentials of the applicant (past permits, licenses etc)
    • Any violations the applicant committed against environmental law
    • A list of all regulatory entities that have or has regulatory responsibility over the applicant

Step 4 – Pay Fees

The following fees must be paid when applying for a UST license:

• • $300 application fee for the Contractor UST License
  • $300 application fee for the Company UST License
  • $600 application fee for the Contractor and Company UST License

How Do Arkansas Underground Storage Tank Contractors Renew Their License?

The DEQ will mail out renewal applications around six weeks before the license expiration date. The Arkansas UST license is valid for two years from the date of issuance and must be renewed before the expiration date.

Licensees should mail their completed renewal application, along with all required forms and fees, to the following address:

ADEQ
Regulated Storage Tanks Division
5301 Northshore Drive
North Little Rock, Arkansas 72118-5317

What Are the Insurance Requirements for the Arkansas Underground Storage Tank Contractor License?

The State of Arkansas does not require underground storage tank contractors to purchase any form of liability insurance. Contractors must either obtain a $25,000 irrevocable letter of credit or purchase and maintain a $25,000 underground storage tanks contractor surety bond.

How Do Arkansas Contractors File Their Bond With The Arkansas DEQ?

Contractors should mail the completed bond form, including the power of attorney, to the following address:

ADEQ
Regulated Storage Tanks Division
5301 Northshore Drive
North Little Rock, Arkansas 72118-5317

The underground storage tank contractors 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 license type of entity/individual(s) buying the bond
• Date the bond is signed

How Can Arkansas Underground Storage Tank Contractors Avoid Bond Claims?

To avoid claims on the Underground Storage Tanks Contractor Bond, contractors must follow all license regulations in the state, including some of the most important issues below that, tend to cause claims:

• Properly install, repair, upgrade, close, and test underground storage tanks
• Do not engage, or allow representatives of the business to engage, in any acts of fraud

What Other Insurance Products Can Agents Offer Contractors in Arkansas?

Arkansas does not require underground storage tank contractors to obtain general liability insurance. However, most reputable contractors will obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue any form 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 Arkansas Underground Storage Tank Contractor Customers?

Arkansas conveniently provides a public database to search for active underground storage tank 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.

What other Contractor License Bonds are required in Arkansas?

Contractors in Arkansas will need to obtain specific bonds correlating with their license type. Contractors seeking to obtain a Commercial Contractor License in Arkansas will need to purchase a $10,000 Commercial Contractor Bond.