Minnesota Elevator Contractor Bond: A Comprehensive Guide
This guide provides information for insurance agents to help contractors on Minnesota Elevator Contractor or Limited Elevator Contractor Bonds
At a Glance:
- Lowest Cost: $250 per year or $25 per month
- Bond Amount: $25,000
- Who Needs It: All individuals and business entities seeking to obtain an Elevator Contractor License in the State of Minnesota
- Purpose: To ensure the public will receive compensation for any damages should the contractor fail to comply with contractor licensing law
- Who Regulates Elevator Contractors in Minnesota: The Minnesota Department of Labor and Industry (MDLI)
Background
Minnesota Administrative Rules 326B.33 requires every licensed Elevator Contractor to obtain a surety bond prior to conducting business operations. The Minnesota 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 licensing law, Elevator Contractors in Minnesota must purchase and maintain a $25,000 Elevator Contractor Surety Bond to be eligible for licensure.
What is the Purpose of the Minnesota Elevator Contractor Bond?
Minnesota requires contractors to purchase the Elevator Contractor Bond as part of the application process to obtain an Elevator Contractor License. The bond ensures that the public will receive compensation for financial harm if the contractor fails to comply with 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 a Minnesota Elevator Contractor Surety Bond?
BondExchange makes obtaining a Minnesota Elevator 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 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 Minnesota Elevator Contractor Surety Bond?
No, a credit check is not required for the Minnesota Elevator Contractor Bond. Because this bond is considered relatively low-risk, the same low rate is offered to all elevator contractors in Minnesota.
How Much Does the Minnesota Elevator Contractor Surety Bond Cost?
The $25,000 Minnesota Elevator Contractor surety bond costs either $250 per year or $25 per month.
How Does Minnesota Define “Elevator Contractor”?
The DLI defines elevator contractor as any independent business who performs the work of “installing, maintaining, altering, repairing or testing elevators and elevator-related devices in Minnesota.”
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 Elevator Contractors Apply for a License in Minnesota?
Contractors in Minnesota must navigate several steps to secure their Elevator Contractor License. Below are the general guidelines, but contractors should refer to the application form for details on the process.
License Period – The Minnesota Elevator Contractor License expires on the last day of February of even numbered years (2020, 2024 etc) and must be renewed before the expiration date
Step 1 – Start a Business
Contractors must create a business entity and register with the Minnesota Secretary of State prior to submitting their license application
Step 2 – Purchase Insurance
Elevator Contractors must purchase liability insurance with the following minimum limits:
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- $100,000 per person
- $300,000 per occurrence
- $50,000 for property damage
Contractors with employees must also purchase workers’ compensation insurance
Step 3 – Purchase a Surety Bond
Contractors must purchase and maintain a $25,000 elevator contractor bond
Step 4 – Complete the Application
All new contractor regulatory license applications and contractor regulatory license renewal applications should be completed online. Completed applications should include the following items:
How Does a Minnesota Elevator Contractor Renew Their License?
Elevator contractors can renew their license online here. The Minnesota Elevator Contractor License expires on the last day of February of even numbered years (2020, 2024 etc) and must be renewed before the expiration date.
What Are the Insurance Requirements for the Minnesota Elevator Contractor License?
The State of Minnesota requires elevator contractors to obtain liability insurance with the following minimum limits:
- $100,000 per person
- $300,000 per occurrence
- $50,000 for property damage
Contractors with employees must also obtain workers’ compensation insurance. All elevator contractors must purchase and maintain a $25,000 Elevator Contractor Bond.
How Do Minnesota Elevator Contractors File Their Bond?
Contractors should mail the completed bond form, including the power of attorney, to the following address:
Minnesota Department of Labor and Industry
Construction Codes and Licensing Division
Licensing and Certification Services
PO Box 64227
St. Paul, MN
The Elevator Contractor surety bond requires signatures from both the surety company and the contractor. The surety company should include the following information on the bond form:
- Legal name, address, and phone number of the entity/individual(s) buying the bond
- Surety company’s name, address, and phone number
- Date the bond goes into effect
- Date the bond is signed and sealed
What Can Contractors Do to Avoid Claims Against the Minnesota Elevator Contractor Bond?
To avoid claims on the Elevator Contractor Bond, contractors must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:
- Do not engage in any acts of fraud
- Honor all contractual agreements
- Follow all building code regulations
What Other Insurance Products Can Agents Offer Elevator Contractors in Minnesota?
Minnesota requires elevator contractors to obtain liability insurance. Contractors with employees will also need to purchase workers’ compensation insurance. Bonds are our only business at BondExchange, so we do not issue any form of 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 Minnesota Elevator Contractor Customers?
Minnesota conveniently provides a public database to search for active elevator 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.
