Right of Way Bond Guide
Public right of way surety bonds are often required at the city or county level before a contractor can receive a construction permit. Learn how they work and get a free bond quote in this guide.
Bond Overview
- Purpose: To guarantee proper completion of work in or near a publicly-owned right of way per local ordinances
- Who Needs It: Contractors who need a permit to perform work on a public right of way
- Regulating Body: The local government agency overseeing contractor licensing and/or building regulations
- Premium Rates: Varies per bond, often available for instant purchase at a flat rate of 0.5–1.5% of the bond amount
SuretyBonds.com offers the best service and fastest delivery for right of way construction bonds in the industry. Continue reading to learn how to get bonded quickly and easily.
What Is a Right of Way Bond?
A right of way bond, also called a ROW bond, is a type of license and permit bond that guarantees the performance of work in a publicly owned right of way. These bonds are typically required before a contractor can obtain a ROW permit or start any work on or involving the public right of way.
Right of way surety bonds have two primary purposes:
- Protect consumers from negligent or damaging consequences from contractor work on public ROWs
- Guarantee proper and timely work on ROWs within the parameters of the construction permit and local ordinances
What Is a Publicly Owned Right of Way?
A right of way refers to any type of public property that allows one or more persons to reach another location, such as sidewalks, public parking lots, power line systems, sewage or water pipes, etc.
This can also be a private property where a public service must be stored or installed. Often, a contractor’s ROW work will be the installation, maintenance or removal of some associated public system.
How Do ROW Bonds Work?
A ROW bond guarantees that the principal will follow all guidelines and terms established by the bond and the city, county or state in which they are working.
The surety bond is an agreement between three parties:
- The obligee is the government entity that requires the bond.
- The principal is the individual or company that obtains the surety bond.
- The surety is the company that issues the bond.
If an individual faces damages or is harmed by any negligent actions, they can file a claim up to the bond’s full amount. The surety company will provide funds to cover valid claims. The bondholder is then required to refund the surety.
How Much Does a ROW Bond Cost?
Right of way bonds can typically be issued instantly online for a set premium. However, some may require underwriting consideration. Apply today for your free quote.
Instant Issue ROW Bonds
If a ROW bond can be issued instantly, it is typically for a percentage of the bond amount. For example, a Kent County, Michigan right of way bond is issued for $20,000 and costs $200, just 1% of the total bond amount.
You can save up to 25% for select instant issue bonds by choosing a multi-year bond term.
Underwritten ROW Bonds
ROW bonds can be underwritten for a variety of reasons. The bond could have a varying amount, there could be a history of claims against that bond, or the bond amount could be large.
Underwriting will determine the unique quote for each individual by considering the project scope and the applicant’s financial strength.
How to Get a Right of Way Permit
Cities and states often have specific processes to obtain a ROW permit as a contractor. However, there are typically a few standard requirements:
- Complete a permit application
- Pay the permit fee
- Indicate possession of a contractor license
- File a right of way bond
Double-check with the obligee to ensure all you submit all necessary materials and confirm receipt by their office.
