Residential Contractor ($20,000) Bond - Statewide in Alaska

Brief Summary

The $20,000 bond is the reduced rate Alaska gives a general contractor who holds the residential endorsement and builds only homes. A surety bond on form 08-4971 gets you registered without parking $20,000 in a state trust account as a cash deposit.

Alaska sets the contractor bond at $20,000 for a general contractor with a residential contractor endorsement who performs exclusively residential work, under AS 08.18.071(b)(2). A general contractor who also takes commercial jobs posts $25,000 instead. The bond runs to the State of Alaska, is filed with the Division of Corporations, Business and Professional Licensing on Surety Bond form 08-4971, and must be dated within 30 days of when the division receives it.

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How to Apply for a Residential Contractor ($20,000) Bond:

• Confirm you hold or are applying for the residential contractor endorsement and will do only residential work.
• Apply with a surety and pay the premium.
• Have the surety complete Surety Bond form 08-4971 at $20,000, signed by you and the surety, with its power of attorney attached.
• Get a certificate of general liability insurance, and workers compensation if you have employees.
• Make sure every name on the bond and insurance matches your application, including DBAs.
• Submit the bond, insurance and $350 in fees to the division within 30 days of the bond date.

Detailed Information About the Alaska Residential Contractor ($20,000) Bond:

The $20,000 rate depends on doing only residential work

AS 08.18.071 sets contractor bonds by registration type. A general contractor pays $25,000. A general contractor with a residential contractor endorsement under AS 08.18.025 who performs exclusively residential work pays $20,000. Mechanical and specialty contractors pay $10,000, and a contractor limited to single projects of $10,000 or less pays $5,000. If you hold the endorsement but also bid commercial work, the $20,000 bond is not enough.

Who needs the endorsement

AS 08.18.025 bars a general contractor from building or altering a privately owned residential structure of one to four units, or bidding or advertising that work, without a residential contractor endorsement. Alteration means changes worth more than 25 percent of the structure's value. The endorsement requires passing the residential contractor exam and completing the Alaska Craftsman Home Program or a postsecondary arctic engineering course, or an equivalent, within the two years before applying. Neither of those replaces the bond.

What the bond guarantees

The bond runs to the state and covers taxes and contributions owed to the state and local governments, payment to people supplying labor, materials or rented equipment, and judgments for negligent or improper work, breach of contract or damage to public facilities. Claimants sue on the bond in district court under AS 08.18.081. When claims exceed the bond, they are paid in this order: labor, taxes and contributions, material and equipment, breach of contract, then repair of public facilities. A suit can be filed up to three years after the bond is canceled.

Filing details

Use Surety Bond form 08-4971 signed by both the contractor and the surety, with the surety's power of attorney attached. The bond and insurance documents must be dated no more than 30 days before the division receives them, and the business and DBA names must match the application exactly. In place of a bond you can file a cashier's check or a certificate of deposit for $20,000 assigned to the state.

Fees, insurance and term

The application fee is $100, nonrefundable, plus a $250 registration fee. You also need general liability coverage of at least $20,000 property damage, $50,000 for injury to one person and $100,000 for injury to more than one person, plus workers compensation if you have employees. Registrations run two years and expire December 31 of even numbered years.

Premium

The surety sets the premium after reviewing the owner's personal credit and the business history.

Eligibility and Requirements for a Alaska Residential Contractor ($20,000) Bond:

• Bond amount of $20,000 for exclusively residential general contractors under AS 08.18.071(b)(2).
• State of Alaska named as obligee.
• Surety Bond form 08-4971 with the surety's power of attorney.
• Bond dated no more than 30 days before the division receives it.
• General liability insurance at the statutory minimums.
• Residential contractor endorsement under AS 08.18.025.

Alaska Residential Contractor ($20,000) Bond FAQs:

Official and Additional Resources for the Alaska Residential Contractor ($20,000) Bond: