Out-of-State Contractor Bond in Iowa

What this bond requires in Iowa

Iowa does not require a state contractor license bond from in-state contractors, but every contractor with a principal place of business outside Iowa must file a $25,000 surety bond to register, regardless of whether they have an Iowa branch office. The bond guarantees payment of Iowa taxes, penalties, and other amounts owed to the State; only the State of Iowa and its agencies may collect on it. Contractor registration was created by Chapter 91C (1988) to enforce workers compensation and unemployment insurance compliance.

Who requires it

The out-of-state contractor bond is required by the Iowa Division of Labor (Iowa Workforce Development) - Contractor Registration; administered with the Iowa Department of Inspections, Appeals & Licensing (DIAL) under Iowa Code Chapter 91C (Construction Contractor Registration); rules at Iowa Admin. Code 875 Ch. 150 et seq..

How to file in Iowa

Out-of-state contractors complete the contractor registration application through Iowa DIAL/Iowa Division of Labor, pay the $50 registration fee, and file the $25,000 bond on the state Out-of-State Bond form. The bond form must be executed by an Iowa-licensed surety with the company seal, two original signatures, and the Power of Attorney attached. Iowa DOT-prequalified bidders may submit their DOT prequalification letter in lieu of the bond.

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FAQ

Common questions

Is a out-of-state contractor bond required in Iowa?

Yes. Iowa requires out-of-state contractor bonds issued by an admitted surety. The required amount is $25,000.

How much is the bond in Iowa?

The bond amount is $25,000. Your annual premium is a small percentage of that, based on credit and experience.

Who requires the bond?

The bond is required by the Iowa Division of Labor (Iowa Workforce Development) - Contractor Registration; administered with the Iowa Department of Inspections, Appeals & Licensing (DIAL).

How is the bond filed?

Out-of-state contractors complete the contractor registration application through Iowa DIAL/Iowa Division of Labor, pay the $50 registration fee, and file the $25,000 bond on the state Out-of-State Bond form. The bond form must be executed by an Iowa-licensed surety with the company seal, two original signatures, and the Power of Attorney attached. Iowa DOT-prequalified bidders may submit their DOT prequalification letter in lieu of the bond.

What does the bond cover?

Surety bonds protect the obligee, not the principal. If you fail to meet the obligation the bond guarantees, the surety pays the claim and recovers from you.

Is a surety bond the same as insurance?

No. Insurance protects you. A surety bond protects whoever required the bond. You repay the surety for any claim they pay.