Bonding in Maine

A surety bond is a 3-party promise. The contractor (the principal) pays a surety company for a bond that a customer, subcontractor, or a government body (the obligee) can draw against if the contractor breaks the rules the bond covers. The surety pays valid claims up to the bond face value. The contractor then owes the surety for what the surety paid out. A bond protects the public. It is not insurance for the contractor. Maine relies on bonds for public work and for specific trades, not for a blanket contractor license. Keep these Maine-specific bond contexts separate. 1. No statewide general contractor license bond. Maine does not issue a statewide general contractor license, so there is no statewide license bond for GCs. Trade licenses (electrician, plumber, fuel-system technician) run through the Maine Office of Professional and Occupational Regulation; the Board rules for these licenses condition issuance on proof of experience, exam results, and background review rather than a surety bond. 2. Public construction: Little Miller Act, 14 M.R.S.A. §871. Maine's public-construction bond statute (often referred to as Maine's Little Miller Act) requires performance and payment security on contracts with the State of Maine or its political subdivisions that exceed a statutory threshold. Under 14 M.R.S.A. §871, a contractor awarded a State-level construction contract above $125,000 must furnish a performance bond and a payment bond, each equal to 100% of the contract price. Lower thresholds or alternative security may apply for smaller contracts and for contracts with counties, cities, and towns; check the specific procurement statute and solicitation. The payment bond protects subcontractors and suppliers, because mechanic's liens generally cannot attach to public property. Source: 14 M.R.S.A. §871 (https://www.mainelegislature.org/legis/statutes/14/title14sec871.html). 3. Transportation and Department of Transportation bonds. Maine Department of Transportation construction contracts require bid, performance, and payment bonds under the MaineDOT Standard Specifications. The bond amount for performance and payment is typically 100% of the contract price. Source: MaineDOT (https://www.maine.gov/mdot/contractors/). 4. Private construction: mechanic's and materialman's lien. On private Maine projects, subcontractors and suppliers rely on the mechanic's-lien procedures at 10 M.R.S.A. Chapter 603 rather than a contractor license bond. An owner may post a bond to discharge a lien and clear title; that is a project-specific lien tool, not a license bond. Source: 10 M.R.S.A. Chapter 603 (https://www.mainelegislature.org/legis/statutes/10/title10ch603sec0.html). 5. Specific Maine surety bonds for trades. Maine-licensed Electricians, Plumbers, and Fuel Board technicians are not required by the state Boards to post a surety bond as a condition of licensure. Municipalities and specific public-works contracts may require project-specific bonds. Some Maine construction employers post a workers' compensation self-insurance bond if they elect to self-insure, under 39-A M.R.S.A. §403. Source: Maine Workers' Compensation Board (https://www.maine.gov/wcb/). Premium math. A surety charges an annual premium, typically 1% to 3% of the bond face value for a contractor with strong credit and no prior claims. Weaker credit, tax liens, prior surety losses, or a new business can push the rate to 5% to 10% or more. Project performance and payment bonds on a Maine public-works contract are priced per job, usually 0.5% to 3% of the contract price. Bond, insurance, and workers' compensation are separate requirements. A Maine contractor typically carries general-liability insurance appropriate to the trade, commercial auto, and workers' compensation under Maine Workers' Compensation Act (Title 39-A). Bonding is a per-project requirement on public work and specific private contracts. Verify each requirement against the current statute and the contract before you assume you are compliant.