Before contractors in Raleigh, North Carolina begin work that could disturb public streets or sidewalks, they must first obtain a Right-of-Way Bond in the amount of at least $5,000 as a performance guarantee for their work. The bond (also known as the Works In Public Streets Bond) serves as a means of financial guarantee from Jet Insurance Company to the City that the work will be done by the contractor in accordance with applicable ordinances, and that the city will be reimbursed in the event that it needs to complete the repairs on behalf of the contractor.
When you buy your bond with Jet, you are cutting out the middlemen who slow down the process and charge you more for your bond in the form of fees and commissions.
At Jet, the Right-of-Way Bond costs as little as $100. Pursuant to the Raleigh Code of Ordinances, the bond cost will ultimately be determined by the bonding amount approved by the Director of Transportation and for bonding amounts $20,000 or below the cost for the bond with Jet is always $100. For larger bonding amounts, Jet may consider the personal credit score of the contractor to determine the bond cost.
With Jet, you are buying your bond with the direct carrier, which means you are working with the same team from our smooth, streamlined application process, all the way to the release of your bond at the end of your project.
The Right-of-Way Bond exists as a performance guarantee to the City of Raleigh, ensuring that when a contractor begins work that disturbs a public thoroughfare such as a sidewalk or street, that the work will be completed and that the public area will be returned to its original state. In the event that the work is abandoned by the contractor, or not completed to the standards of the city’s ordinances, the bond provides a monetary means by which the city can rectify the situation by completing or repairing the work performed. Jet Insurance Company is a third party guarantor of the funding that may be needed by the City.
For bond amounts below $25,000 the application process is simple: if you provide the basic information about your company and permit for your project, you can pay for and complete your bond online.
For bonding amounts greater than $25,000, we will need to perform a quick credit check and you will have the bond ready for purchase moments later. Obviously with the higher bond limit we need to verify a level of financial stability before rating the bond.
In either case, the bond application can be completed in minutes, so you can get back to business as quickly as possible. Once your purchase is complete, we will send you a copy of your bond along with your receipt.
Yes, Jet can! Once you have finished buying your bond, Jet will file an electronic copy with the City of Raleigh’s Development Services Department, and a copy will be available immediately after purchase and emailed to the address you provided.
If you wish to send the original bond to the City of Raleigh yourself, that option will be available at checkout. Please note that all applicable paperwork must be delivered to the following address:
Development Services Customer Service Center
1 Exchange Plaza
Raleigh, NC 27601
Due to the bond’s express purpose (financially ensuring restoration of the city’s streets and sidewalks after work is performed), the bond cannot be cancelled by the contractor or Jet once posted. The City of Raleigh must provide release before the bond can be cancelled and you can be released from the liability associated with the project.
The Right-of-Way Bond is typically written to cover a period of time agreed to by the contractor and the city. However, should a project require additional time to complete the work described in its permit, a contractor may file for extension. In this case, the bond will need to be renewed by Jet (as the original term of the bond only lasts a year), and a certificate of continuance will need to be sent to the City of Raleigh.
The contractor and Jet will be released from the bond obligation when the contractor closes the permit process for the project covered by the bond. Once all work is completed and inspections are complete, the bond can be released by the city’s Director of Transportation.
In order to avoid claims against the bond, contractors must restore the public thoroughfare impacted by their work to its original state, as well as comply with their permit and the guidelines in the city’s Code of Ordinances. Should you find yourself running low on cash and resources to complete the project, it is in your best interest to begin working with the City on a solution. Additionally, if the City comes to you with a complaint on the condition of the right-of-way you should once again find a solution to solve the problem. Failure to do so will lead to a set of worsening actions against you including lawsuits, civil actions and claims against your bond.
If the City of Raleigh finds that the public streets or sidewalks were not returned to their original condition, it may process a claim directly with Jet. It is in the best interest of the contractor to provide as much information to Jet regarding the project as possible. To assess the validity of the claim, Jet will thoroughly investigate the circumstances and provide defense as much as is viable.
Jet may determine the claim is valid which unfortunately for our customers can be the case as we have a legal duty as a surety company to make payment to damaged parties. For a bona fide claim Jet will make the demanded payment up to the limit of the bond. Unlike other insurance policies where the story ends with future premiums being higher, surety bonds must be paid back by the culpable party, in this case the contractor. The surety bond is a guarantee of payment, not a government slush fund, so must be made whole again.
Yes, in addition to the Right-of-Way Bond, any contractor performing work that could damage public streets or sidewalks must also show proof of adequate public liability insurance, as outlined in the city’s Code of Ordinances. Other North Carolina construction-related bonds can be found by clicking here.