North Carolina Statement of Bonding Ability: A Comprehensive Guide

This guide provides information for insurance agents to help electrical contractors on North Carolina Statements of Bonding Ability

At a Glance:

• Lowest Cost:
  • $60,000 Statement: $120 per year or $12 per month
  • $150,000 Statement: $300 per year or $30 per month
• Statement of Bonding Ability Amount:
  • $60,000 for intermediate electrical contractors
  • $150,000 for unlimited electrical contractors
• Who Needs It: All individuals and business entities applying for either an intermediate or unlimited electrical contractor license in the State of North Carolina
• Purpose: To confirm that electrical contractors are able to obtain a performance bond for electrical construction contract jobs
• Who Regulates Electrical Contractors in North Carolina: The North Carolina Board of Examiners of Electrical Contractors

Background

North Carolina Statute 87-43 requires electrical contractors operating in the state to obtain a license with the Board of Examiners of Electrical Contractors. The North Carolina legislature enacted the licensing laws and regulations to ensure that electrical contractors engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, electrical contractors must purchase and maintain either a $60,000 or $150,000 statement of bonding ability to be eligible for licensure.

What is the Purpose of the North Carolina Statement of Bonding Ability?

North Carolina requires electrical contractors to purchase the Statement of Bonding Ability as part of the application process to obtain an electrical contractor license. The statement confirms that an authorized surety company deems the contractor as eligible to obtain a performance bond prior to performing work on an electrical construction job. In short, the statement is an acknowledgment from a surety company that the contractor meets the necessary qualifications to obtain a performance bond.

What is a Statement of Bonding Ability

A statement of bonding ability is simply an acknowledgment from a surety company that the applicant will be approved for a surety bond up to the required bond amount. For North Carolina electrical contractors, the statement of bonding ability proves to the Board of Examiners of Electrical Contractors that the contractor can obtain either a $60,000 (intermediate license holders) or $150,000 (unlimited license holders) performance bond. Claims cannot be made against a statement of bonding ability, as it is not considered a surety bond. Surety companies are not legally bound to issue a performance bond to contractors who have received a statement of bonding ability

How Can an Insurance Agent Obtain a North Carolina Statement of Bonding Ability? 

BondExchange makes obtaining a North Carolina Statement of Bonding Ability easy. Simply Gain access to your account and use our keyword search to find the “contractor” statement 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 (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 North Carolina Statement of Bonding Ability?

No, a credit check is not required to obtain a North Carolina Statement of Bonding Ability. Since claims cannot be made against a statement of bonding ability, the same low rate is offered to all electrical contractors in North Carolina

How Much Does the North Carolina Statement of Bonding Ability Cost?

The North Carolina Statement of Bonding Ability costs the following amounts:

• $60,000 Statement: $120 per year or $12 per month
• $150,000 Statement: $300 per year or $30 per month

The North Carolina Statement of Bonding Ability does not expire, and electrical contractors only need to make a one time payment to obtain it.

How Does North Carolina Define “Electrical Contractor”?

North Carolina Statute 87-43 defines an electrical contractor as any individual or business entity who engages or offers to engage in “the business of installing, maintaining, altering or repairing any electric work, wiring, devices, appliances or equipment” as an independent business.

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 Electrical Contractors Apply for a License in North Carolina?

Electrical contractors in North Carolina must navigate several steps to secure their electrical contractor license. Below are the general guidelines, but contractors should refer to the licensing statutes for details on the process.

License Period – The North Carolina electrical contractor license is valid for one year from the date of issuance and must be renewed before the expiration date

Step 1 – Determine the License Scope

North Carolina requires electrical contractors to obtain specific licenses corresponding to the total cost of individual projects the contractor performs. Below are the different scopes for the North Carolina Electrical Contractor License:

• • Unlimited: Contractors may engage in any electrical contracting project regardless of the project cost
  • Intermediate License: The total project cost for individual projects may not exceed $150,000
  • Limited: The total project cost for individual projects may not exceed $60,000 and the equipment or installation in the contract is 600 volts or less

*The following steps are focused solely on how to obtain the Unlimited and Intermediate license classifications. A statement of bonding ability is not required to obtain a Limited license classification

North Carolina also has seven special restricted license classifications for contractors who specialize in a specific type of electrical contract work. A Statement of Bonding Ability is not required to obtain these licenses, so we won’t cover them in detail here. However, contractors can learn more about these license classifications here.

Step 2 – Hire a Qualified Individual

Contractors who do not have the expertise to handle the day-to-day operations of their business must employ a qualifying individual who has knowledge and expertise in the contractor’s line of business. Qualified individuals must meet the following requirements:

• • Be at least 18 years of age
  • Intermediate License: Must have at least 5,750 hours of experience with 5,000 of those hours being *primary experience
  • Unlimited License: Must have at least 9,000 hours of experience with 8,000 of these hours consisting of *primary experience

*Primary experience is defined as working experience where the electrician directly installed, repaired, or altered electrical appliances or equipment

Step 3 – Complete the Examination Application

Qualified individuals must pass an examination prior to being recognized as a qualified individual. To apply for the exam, qualified individuals must mail a completed examination application to the following address:

NC State Board of Examiners of Electrical Contractors
505 N Greenfield Pkwy Suite 100
Garner, NC 27529

Qualified individuals will need to submit a $90 exam fee with their application.

Step 4 – Purchase a Statement of Bonding Ability

Electrical contractors must purchase a Statement of Bonding Ability in the following amounts

• • $60,000 for intermediate license applicants
  • $150,000 for unlimited license applicants

Step 5 – Complete the License Application

All electrical contractor regulatory license applications should be mailed to:

NC State Board of Examiners of Electrical Contractors
3101 Industrial Drive, Suite 206
Raleigh, NC 27609

Contractors must complete the application, including the following steps:

5.a Business Registration – All corporations and LLCs must register their business entity with the North Carolina Secretary of State

5.b Fees – Electrical contractors must pay the following fees when submitting their license application:

• • $140 for intermediate license applicants
  • $190 for unlimited license applicants

How Does a North Carolina Electrical Contractor Renew Their License?

Electrical contractors can renew their licenses online through the Board of Examiners of Electrical Contractor’s licensing portal. Qualified individuals must complete a continuing education course each renewal period. The North Carolina electrical contractor license is valid for one year from the date of issuance and must be renewed before the expiration date

What Are the Insurance Requirements for the North Carolina Electrical Contractor License?

The State of North Carolina does not require electrical contractors to obtain any form of liability insurance. Contractors applying for an intermediate license classification will need to purchase a $60,000 Statement of Bonding Ability, while applicants for an unlimited license classification will need to purchase a $150,000 Statement of Bonding Ability.

How Do North Carolina Electrical Contractors File Their Statement of Bonding Ability?

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

NC State Board of Examiners of Electrical Contractors
3101 Industrial Drive, Suite 206
Raleigh, NC 27609

The following information must be included on the statement:

• Legal name and address of the entity/individual(s) buying the statement
• Surety company’s name and address
• Type of financial statement required by the surety company

What Other Insurance Products Can Agents Offer Electrical Contractors in North Carolina?

North Carolina does not require electrical contractors to obtain any form of liability liability insurance. However, most reputable contractors will purchase 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 North Carolina Electrical Contractor Customers?

North Carolina conveniently provides a public database to search for active electrical 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 North Carolina?

Contractors in North Carolina will need to obtain specific bonds correlating with their license type. Below are all the different contractor licensing bonds required by the State of North Carolina:

• Irrigation Contractor: $10,000 bond limit
• Landscape Contractor: $10,000 bond limit