Bonding in New Hampshire

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. New Hampshire's bonding landscape is lean at the license level and heavier at the project level. Keep these New Hampshire-specific bond contexts separate. 1. No statewide general contractor license bond. New Hampshire does not issue a statewide general contractor license, so there is no statewide license bond for GCs. The state trade licenses (Master Electrician, Master Plumber, Gas Fitter) issued through OPLC condition licensure on experience, exam results, and background review rather than a surety bond. 2. Public works: RSA 447:16 through 447:18 (New Hampshire Little Miller Act). New Hampshire's Little Miller Act requires bonds on public construction contracts. RSA 447:16 states that a state agency, county, town, city, school district, or village district awarding a construction contract above $125,000 shall require a payment bond in the amount of 100% of the contract price before work begins. RSA 447:18 provides the statutory claim procedure for subcontractors and suppliers against that bond. Some solicitations also require a performance bond in the same amount; check the procurement documents. Subcontractors on bonded public jobs cannot file mechanic's liens against public property and instead perfect claims against the payment bond under RSA 447. Source: RSA 447, Liens (https://www.gencourt.state.nh.us/rsa/html/xlv/447/447-mrg.htm). 3. Department of Transportation bonds. New Hampshire Department of Transportation construction contracts require bid, performance, and payment bonds under the NHDOT Standard Specifications for Road and Bridge Construction. Performance and payment bonds on NHDOT contracts are typically 100% of the contract price. Source: NHDOT Bureau of Highway Design and Construction (https://www.dot.nh.gov/). 4. Private construction: mechanic's lien. On private New Hampshire projects, subcontractors and suppliers rely on the mechanic's-lien procedure at RSA 447:2 through 447:14 rather than a contractor license bond. An owner may bond over a lien to discharge it and clear title under RSA 447:12-a; this is a project-specific lien tool, not a license bond. Source: RSA 447 (https://www.gencourt.state.nh.us/rsa/html/xlv/447/447-mrg.htm). 5. Workers' compensation self-insurance bond. An employer that elects to self-insure for workers' compensation under RSA 281-A:5 must file security with the NH Department of Labor, which may include a surety bond. Standard practice is to purchase a workers' comp policy from a carrier rather than self-insure; self-insurance is reserved for very large employers. Source: NH Department of Labor (https://www.nh.gov/labor/). 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 NH public-works contracts are priced per job, usually 0.5% to 3% of the contract price depending on size and financial statements. Bond, insurance, and workers' compensation are separate requirements. A New Hampshire contractor typically carries general-liability insurance appropriate to the trade, commercial auto, and workers' compensation under RSA 281-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.