Mechanical Contractor ($10,000) Bond - Statewide in Alaska

Brief Summary

A mechanical contractor in Alaska posts a $10,000 bond, not the $25,000 a general contractor posts. The bond runs to the State of Alaska, goes on the state's own Surety Bond form 08-4971, and stays in force until someone cancels it, so you are not buying a new bond every renewal cycle. Paying a premium keeps $10,000 of cash out of a state deposit account.

Alaska Statute 08.18.071(b)(3) sets the bond for a mechanical contractor at $10,000, filed with the registration application and running to the state. A cash deposit or other negotiable security of the same amount is accepted instead. Registration also requires a licensed mechanical administrator under AS 08.40, liability insurance, a $100 application fee and a $250 registration fee, and it expires December 31 of even-numbered years.

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How to Apply for a Mechanical Contractor ($10,000) Bond:

• Confirm your work fits the mechanical contractor definition in AS 08.18.171 and not the general contractor definition, which carries a $25,000 bond.
• Have the business name exactly as it appears on the registration application.
• Identify the licensed mechanical administrator who is the applicant or is employed by the applicant.
• Complete the bond application with owner details for the credit review.
• Pay the premium and receive the executed bond on Alaska form 08-4971 with the surety's seal and power of attorney.
• File the bond, form 08-4817, proof of insurance and the $350 in fees with the Construction Contractors Program within 30 days of the bond date.

Detailed Information About the Alaska Mechanical Contractor ($10,000) Bond:

Which bond tier applies to you

AS 08.18.071 sets four bond amounts for Alaska construction contractors:

• General contractor: $25,000
• General contractor with a residential contractor endorsement who performs exclusively residential work: $20,000
• Mechanical or specialty contractor, or home inspector: $10,000
• Contractor whose work on one project has an aggregate contract price of $10,000 or less (the handyman registration): $5,000

Under AS 08.18.171, a mechanical contractor is one whose business involves plumbing, pipe fitting, sheet metal, heating, air conditioning, ventilating, or sprinkler and dry chemical fire protection trades. A business that uses more than three trades, or supervises mechanical or specialty subcontractors, fits the general contractor definition and the $25,000 bond instead.

What the bond guarantees

The bond runs to the State of Alaska and is conditioned on the contractor paying taxes and contributions due the state and political subdivisions, paying people who furnish labor, material or rented equipment, and paying amounts adjudged against the contractor for negligent or improper work, breach of contract, or damage to public facilities during a construction project.

The administrator license does not replace the bond

The state may not register a mechanical contractor unless the applicant is, or employs, a person currently licensed as a mechanical administrator under AS 08.40. That license controls which disciplines you can perform (plumbing, heating, sheet metal or refrigeration). It is a separate requirement. You still file the $10,000 bond.

How long the bond lasts

The bond remains in effect until cancelled by the surety, the principal or the commissioner, and a claim action can be brought up to three years after cancellation. At renewal the state accepts a bond continuation certificate as proof the existing bond is still in force. If you post a cash deposit instead, the state does not release it until three years after you stop doing business or three years after a replacement bond or new deposit takes effect.

Filing details

• Bond form: Surety Bond, form 08-4971, signed by principal and surety, with the surety's seal and power of attorney attached
• Dated no more than 30 days before the office receives it, with the business name matching the application exactly
• Application: Mechanical Contractor Registration, form 08-4817, $100 nonrefundable application fee plus $250 registration fee
• Insurance: at least $20,000 property damage, $50,000 injury to one person and $100,000 injury to more than one person, plus workers' compensation if you have employees or operate as a corporation or LLC
• Term: two years, expiring December 31 of even-numbered years

AS 08.18.161 exempts some activity from registration altogether, including government representatives, public utilities regulated by the Regulatory Commission of Alaska, and an owner who hires a registered contractor. Premium is set by the surety's underwriting, mainly the owner's credit and business history.

Eligibility and Requirements for a Alaska Mechanical Contractor ($10,000) Bond:

• Bond amount of $10,000 under AS 08.18.071(b)(3).
• State of Alaska named as obligee.
• Surety Bond form 08-4971 signed by both principal and surety.
• A mechanical administrator licensed under AS 08.40.
• Liability insurance of at least $20,000, $50,000 and $100,000, and workers' compensation where required.

Alaska Mechanical Contractor ($10,000) Bond FAQs:

Official and Additional Resources for the Alaska Mechanical Contractor ($10,000) Bond: