Surety bonds • South Dakota
South Dakota Public Improvement Bonds (SDCL 5-21): Requirements and Claims
Under SDCL 5-21-1, contractors on South Dakota public improvement contracts must furnish surety of at least the contract price before starting work, covering faithful performance and prompt payment of laborers and material suppliers. The public owner may waive the security when the bid is within the competitive bidding limit.
This guide covers the requirement, waivers, claim rules, and cost. Blake Insurance Group is an independent agency and does not give legal advice; a licensed agent can help contractors set up bonding.
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The bond requirement
| Rule | Detail |
|---|---|
| Amount | Surety of not less than the contract price, furnished before work starts |
| Conditions | Faithful performance and prompt payment for labor and materials |
| Waiver | Allowed when the bid is within the limit set under SDCL 5-18A-14 |
| Emergencies | Waiver allowed for qualifying emergency procurements |
Source: SDCL chapter 5-21.
Claims on the bond
- If the public owner sues within six months after completion and final settlement, unpaid suppliers may join within one year of completing the work.
- If the owner does not sue, an unpaid supplier may sue in the owner’s name after six months, and within one year after that.
- Where no bond was required, claims against the public owner must be brought within 90 days after the work is accepted.
Source: SDCL chapter 5-21.
Who the bond protects
The security protects the public owner and the laborers and suppliers on the project. See our performance bond and payment bond guides.
How much South Dakota contract bonds cost
Contract bonds are priced as a percentage of the bond amount, commonly about 0.5% to 3% based on the contractor’s finances and experience (NASBP).
South Dakota public works bond FAQs
How much is the South Dakota public improvement bond?
At least the full contract price.
Can South Dakota waive public improvement bonds?
Yes, when the bid is within the competitive bidding limit, or for qualifying emergencies.
What does the South Dakota bond cover?
Faithful performance and prompt payment of laborers and material suppliers.
Related guides
Important information
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Cost figures. Published averages and ranges are cited from the sources named, as of the dates shown. They are not quotes and may not reflect your price, which depends on the insurer, the surety, your credit, the bond type, and underwriting.
Availability. Coverage, prices, discounts, and eligibility vary by insurer, state, and applicant, and are subject to underwriting. The issued policy controls.
Your next step
Tell us about your South Dakota public project, and a licensed agent will help you set up bonding.
