Birmingham Land Disturbing Activity Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Birmingham Land Disturbing Activity Bond.
At a Glance:
- Lowest Cost: $100 per year or $10 per month, based on the applicant’s credit
- Bond Amount:
- $1,000 per acre of land disturbed when only clearing operations are performed
- $3,000 per acre of land disturbed when earthwork or a combination of earthwork and clearing operations are performed
- Who Needs it: Persons conducting land disturbing activities in Birmingham, Alabama
- Purpose: To ensure the public will receive compensation for any damages should the principal not complete the work specified in their permit plans or if their work creates hazardous conditions
- Who Regulates Land Disturbing Activities in Birmingham: The Birmingham City Engineer
*The required bond amount will double for operations performed on land designated as a floodway, floodplain, or as susceptible to landslides.
Background
Birmingham Municipal Code Sec. 4-7-11. requires all persons conducting land disturbing activities to obtain a permit with the City Engineer. The Birmingham city council enacted the permit requirement to ensure that all soil erosion and sediment control operations are performed safely. To provide financial security for the enforcement of the permit requirement, persons conducting land disturbing activity within the city must purchase and maintain a surety bond to be eligible for a soil erosion and sediment control permit.
What is the Purpose of the Birmingham Land Disturbing Activity Surety Bond?
Persons conducting land disturbing activities are required to purchase a surety bond as part of the application process to obtain a soil erosion and sediment control permit. The bond ensures that the public will receive compensation for financial harm if the principal fails to comply with the regulations set forth in Birmingham Municipal Code Sec. 4-7-60. Specifically, the bond protects the public in the event the principal fails to complete the agreed-upon work or creates hazardous land conditions. In short, the bond is a type of insurance that protects the public if the principal violates the terms of their permit.
How Can an Insurance Agent Obtain a Birmingham Land Disturbing Activity Surety Bond?
BondExchange makes obtaining a Birmingham Land Disturbing Activity bond easy. Simply log in to your account and use our keyword search to find the “land” 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 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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Is a Credit Check Required for the Birmingham Land Disturbing Activity Bond?
Surety companies will run a credit check on the permit applicant to determine eligibility and pricing for the Birmingham Land Disturbing Activity 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 Birmingham Land Disturbing Activity Bond Cost?
The Birmingham Land Disturbing Activity bond can cost anywhere between 1% to 7.5% of the bond amount per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. BondExchange also offers monthly pay-as-you-go options for these bonds. The chart below offers a quick reference for the bond cost on a $10,000 bond requirement.
$10,000 Land Disturbing Activity Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 680+ | $100 | $10 |
| 625 – 679 | $150 | $15 |
| 575 – 624 | $375 | $38 |
| 550 – 574 | $500 | $50 |
| 500 – 549 | $750 | $75 |
Who is Required to Purchase the Bond?
Birmingham requires all persons conducting land disturbing activity to purchase a surety bond as a prerequisite to obtaining a soil erosion and sediment control permit. To paraphrase Birmingham municipal code Sec. 4-7-4. land disturbing activity is any clearing, grading, excavating, etc. of land that may result in soil being eroded or sediment being moved.
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 Your Customers Apply for a Birmingham Soil Erosion and Sediment Control Permit?
Your customers must navigate several steps to secure a soil erosion and sediment control permit. Below are the general guidelines, but applicants should refer to the application for details on the process.
Step 1 – Purchase a Surety Bond
Applicants for the Birmingham Soil Erosion and Sediment Control Permit purchase and maintain a surety bond.
Step 2 – Complete the Application
All Birmingham Soil Erosion and Sediment Control Permit applications should be mailed or delivered to the following address:
City of Birmingham
Department on Planning, Engineering, and Permits
710 20th Street, North
Room 210, City Hall
Birmingham, Alabama 35203
Your customers must complete the application in its entirety, and submit the following items:
A schedule of all required fees can be found on page two of the application.
Do Your Customers Need to Renew Their Birmingham Soil Erosion and Sediment Control Permits?
No, all Birmingham soil erosion and sediment control permits are valid for the duration of the project. However, your customers must obtain a separate permit for every land disturbing project they undertake.
What are the Insurance Requirements for the Birmingham Soil Erosion and Sediment Control Permit?
Birmingham does not require applicants to obtain any form of liability insurance as a prerequisite to obtaining a soil erosion and sediment control permit. Your customers must purchase and maintain a surety bond with a limit of:
- $1,000 per acre of land disturbed when only clearing operations are performed
- $3,000 per acre of land disturbed when earthwork or a combination of earthwork and clearing operations are performed
*The required bond amount will double for operations performed on land designated as a floodway, floodplain, or is susceptible to landslides.
How is the Birmingham Land Disturbing Activity Bond Filed?
Your customers should mail or deliver their completed bond form, including the power of attorney, to the following address:
City of Birmingham
Department on Planning, Engineering, and Permits
710 20th Street, North
Room 210, City Hall
Birmingham, Alabama 35203
The bond requires signatures from both the surety company that issues the bond and from the permit applicant. The surety company should include the following information on the bond form:
- Legal name of entity/individual(s) buying the bond
- Surety company’s name
- Bond amount
- Date the bond is signed
What Can Your Customers Do to Avoid Claims Against The Birmingham Land Disturbing Activity Bond?
To avoid claims on the Birmingham Land Disturbing Activity bond, your customers must adhere to the terms of their permit, which includes avoiding some of the most important issues below that tend to cause claims:
- Complete all work outlined in the permit
- Ensure that any altered land does not become hazardous
What Other Insurance Products Can Agents Offer Birmingham Soil Erosion and Sediment Control Permit Applicants?
Birmingham does not require applicants for soil erosion and sediment control permits to obtain any form of liability insurance. However, most reputable applicants will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue 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 Birmingham Land Disturbing Activity Bond Customers?
Birmingham conveniently maintains a database of active soil erosion and sediment control permits. Additionally, agents can contact the permitting office directly to obtain this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
