Surety Bond Encyclopedia

Wrecker of Buildings Class B ($10,000) Bond - Minneapolis, MN in Minnesota

Brief Summary

The Class B license is the right fit for contractors who take down houses, garages and small commercial buildings in Minneapolis without the $50,000 bond and higher insurance that Class A carries. The $10,000 bond is filed on the city's own form with the license application, it runs to the December 1 license year, and it renews with the license each year.

Minneapolis licenses building wreckers in two classes under Chapter 277 of the Code of Ordinances. A Class B wrecker may tear down buildings no taller than three stories or 35 feet and no larger than 10,000 square feet above grade, and must file a $10,000 bond with the City of Minneapolis as obligee. Anything bigger requires a Class A license and a $50,000 bond. Licenses expire December 1 and are issued for no longer than one year.

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How to Apply for a Wrecker of Buildings Class B ($10,000) Bond:

Confirm every planned job is within the Class B limits of three stories or 35 feet and 10,000 square feet above grade.
Obtain the $10,000 bond on the city's Wrecker of Buildings, Class B License Bond form with the City of Minneapolis as obligee.
Make sure the principal on the bond matches the licensee name exactly and that signatures are notarized and witnessed.
Get a certificate showing $300,000 personal injury and $50,000 property damage per occurrence, the city as additional insured, and no explosion or collapse exception.
Attach dated notification letters sent to adjoining property owners.
Submit the trade license application, bond, insurance and license fee to Business Licenses, 505 Fourth Ave. S., Room 220, Minneapolis, MN 55415.

Detailed Information About the Minnesota Wrecker of Buildings Class B ($10,000) Bond:

Class A or Class B

This is the question to settle first. A Class A building wrecker may tear down any building or structure regardless of size or height. A Class B building wrecker is limited to buildings not exceeding three stories or 35 feet in height and not exceeding a total of 10,000 square feet above grade. If any job on your schedule exceeds either limit, a Class B license and this $10,000 bond will not cover it. Class A requires a $50,000 bond instead.

The bond

The city publishes its own form, titled Wrecker of Buildings, Class B License Bond. The obligee is the City of Minneapolis and the penal sum is $10,000. The principal agrees to indemnify and save harmless any and all persons against loss from failure to comply with specifications, use quality materials, perform competent work, pay for labor and materials, and fully perform contracts. The bond covers the license year ending the first day of December and may be continued for successive years. The surety may cancel on 30 days written notice served by registered mail. The licensee and the principal on the bond must be the same name, and signatures must be notarized with witnesses.

Insurance is a separate requirement

Class B wreckers must also carry $300,000 for personal injury for one occurrence and $50,000 for loss or damage to any person or property for one occurrence. The city must be named as an additional insured, and the policy may not contain an XC, meaning explosion or collapse, exception. That exclusion is common on standard contractor policies and is the item most likely to hold up an application.

Other application items

The application requires copies of dated notification letters sent to adjoining property owners, showing the contractor name, business address, phone, license number, building address and anticipated start date. The company must keep that documentation for at least 180 days. Licenses are not transferable. Street use and obstruction permits are separate from the license.

Premium

The surety sets the premium from the owner's credit, the company's financial condition and its demolition history. Because the bond also protects people who supply labor and materials, a record of paying subcontractors and suppliers on time helps.

Eligibility and Requirements for a Minnesota Wrecker of Buildings Class B ($10,000) Bond:

Bond amount of $10,000 for Class B, $50,000 for Class A.
City of Minneapolis named as obligee on the city's own bond form.
License year ending December 1, with no license issued for longer than one year.
Surety cancellation only on 30 days written notice by registered mail.
License not transferable to any other person or location.

Minnesota Wrecker of Buildings Class B ($10,000) Bond FAQs:

What is the difference between Class A and Class B?

Class A may tear down any building or structure regardless of size or height and requires a $50,000 bond. Class B is limited to buildings no taller than three stories or 35 feet and no larger than 10,000 square feet above grade, and requires a $10,000 bond.

When does the license and bond expire?

Building wrecker licenses expire December 1. The Class B bond form covers the license year ending the first day of December and can be continued for successive license years.

Why was my insurance certificate rejected?

The city requires that the policy not contain an XC exception, which excludes explosion and collapse. It also requires the city to be named as an additional insured, with at least $300,000 personal injury and $50,000 property damage per occurrence for Class B.

Who does the bond protect?

Under the city's form, the principal indemnifies any and all persons against loss from failing to follow specifications, poor materials or workmanship, failing to pay for labor and materials, or failing to fully perform a contract.

Where do I send the application?

Business Licenses and Consumer Services, Public Service Building, 505 Fourth Ave. S., Room 220, Minneapolis, MN 55415. The office can be reached at 612-673-2080 or businesslicenses@minneapolismn.gov.