Minnesota service contract provider bonds.
From $250.
A company selling extended warranties or service contracts in Minnesota registers with the commissioner of commerce under Minnesota Statutes chapter 59B. One permitted route pairs a funded reserve with a financial security deposit, which a surety bond can supply. Our premium is 1% of the bond amount.
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How much does a Minnesota service contract provider bond cost?
1% of the bond amount, from $250 at the $25,000 minimum. Enter your amount in the calculator for the exact price.
Three steps. One sitting.
Registration paperwork with Commerce takes as long as it takes. The security deposit does not — once you have run the 5 percent calculation, this is the quickest item on the checklist:
Apply online
Your company details, the deposit amount your filing requires, and an effective date. That is the application. No credit check up to $25,000 for individuals and LLCs (above that, a soft pull at most); for partnerships and corporations, one soft pull at every amount, never a hard inquiry.
Pay & e-sign
Your price is final at checkout — 1% of the bond amount. No credit check up to $25,000 except for partnerships and corporations, and most applications approve instantly. Larger deposits may get a brief underwriter look; above $25,000, any check is a soft pull that never affects your score.
File with Commerce
Your executed bond and power of attorney arrive by email, ready to file with the Department of Commerce alongside your registration or your annual renewal. Wet-ink originals mailed on request.
What it is and who needs it.
What the service contract provider bond actually guarantees
A service contract is a promise to repair, replace, or maintain something — a vehicle, an appliance, a phone, a furnace — for a term, in exchange for money paid up front. The consumer pays today for work that may not be needed for years, which is exactly the structure that fails badly when the provider disappears. Minnesota answers that with chapter 59B: the provider, not the seller or the administrator, is the party obligated to the contract holder, and it must register with the commissioner of commerce and prove it can perform.
Chapter 59B gives three ways to prove it, and only one of them involves a bond. A provider can (1) sit behind a reimbursement insurance policy from an insurer or risk retention group meeting a surplus test, (2) maintain a funded reserve of not less than 40 percent of gross consideration received, less claims paid, and place a financial security deposit with the commissioner, or (3) show a net worth or stockholders’ equity of $100,000,000, proved by a recent Form 10-K or 20-F or audited financials — with a parent guarantee if the numbers are the parent’s. This bond is the deposit inside route two.
That makes the amount a moving number rather than a fixed license fee. The deposit must be worth not less than 5 percent of gross consideration received, less claims paid, on all service contracts issued and in force in Minnesota, and never less than $25,000 — so a growing book raises the requirement at renewal. Registration itself renews annually with a fee to the commissioner. It is not insurance for you: if the surety pays a contract holder, you reimburse the surety.
You need this bond if you are
Claims, renewal, filing, and what sets the price.
If a claim is made
A claim comes from the party the bond protects, the obligee named on the form, when the duty the bond guarantees is not met.
The surety investigates and pays a valid claim, up to the bond amount. You then repay the surety: a surety bond is a guarantee of your performance, not insurance for you.
Renewal and term
The premium covers a one-year term from the effective date you choose.
Renew before the expiry date to keep the bond in force: the license, permit or contract it backs expects continuous coverage.
How to file it
File with Commerce. Your executed bond and power of attorney arrive by email, ready to file with the Department of Commerce alongside your registration or your annual renewal. Wet-ink originals mailed on request.
What sets the price
The premium is 1% of the bond amount, $100 minimum: the amount the obligee sets moves the price, not your business profile.
No credit check up to $25,000 for individuals and LLCs (above that, a soft pull at most); for partnerships and corporations, one soft pull at every amount, never a hard inquiry.
Where a check runs, it decides approval; the rate is the same for everyone approved.
One application, issued instantly.
These are the actual issuing fields. No credit check up to $25,000 for individuals and LLCs (above that, a soft pull at most); for partnerships and corporations, one soft pull at every amount, never a hard inquiry. Enter the deposit amount your filing requires and your exact price is set at the application from $250.
Start the application →Common questions.
Other Minnesota bonds.
Price and requirements checked on the carrier’s application, . Page updated .
Finish your chapter 59B registration.
Premiums from $250, no credit check up to $25,000 except for partnerships and corporations, and the bond issues the moment you pay. Enter your deposit figure and file with Commerce the same day. Free until issued.