Surety bonds are required for many professionals in the state of South Dakota in order to protect the public from financial harm. All of these bonds are required at the state level except for building contractor bonds, which are mandated by several SD cities including Sioux City and Sioux Falls.
To make sure you are in compliance with your state or city’s bonding regulations, contact an NNA Surety Bonds specialist. We’ve been providing affordable coverage to companies and individuals across the United States since 1957.
Appraisal management companies are required to obtain a $25,000 surety bond by the South Dakota Department of Labor and Regulation in order to get a business license. The bond provides some financial protection to anyone who suffers a loss due to negligent or improper acts or breach of contract by the appraiser or appraisal management company, as detailed in South Dakota Codified Law 36-21D-10. Improper acts may include altering a report submitted by an appraiser or attempting to impair an appraiser’s independence and impartiality.
Bond approval is subject to underwriting, meaning various factors are taken into consideration to calculate your premium. Applicants with excellent credit could pay a premium as low as $250.
Only three construction trades are licensed at the state level in South Dakota: electricians, plumbers, and asbestos abatement contractors. General building contractors in SD are not licensed or bonded at the state level.
The city of Sioux Falls requires residential building contractors to post a $20,000 bond. Sioux City requires a license bond in the amount of $10,000 for general building contractors. Other cities that require general contractors to be licensed include Aberdeen, Brandon, and Brookings. If you have questions about your city’s bonding regulations, contact NNA Surety Bonds for help.
The South Dakota Division of Banking requires money lenders to post a bond in the amount of $10,000 for their first location and $2,500 for each additional business location, according to SD Codified Laws 54-4-42. This bond provides a means of compensation for any injured party whose claim against the lender is upheld. Prohibited acts include breach of trust or fiduciary duty, violation of state or federal statutes, making false representations, and engaging in unfair lending practices.
Bond premiums cost a small percentage of the bond’s full coverage amount, and will vary with the size of your policy and underwriting assessment of your credit score and business finances.
Mortgage brokers in South Dakota must post a surety bond sized according to the table below:
|Annual Loan Volume||Bond Amount||Annual Premium|
|Up to $25 million||$25,000||$188|
|$25 million to $100 million||$35,000||$263|
|Over $100 million||$50,000||$375|
This policy helps protect customers in the event of improper lending practices by the mortgage broker, such as pressuring buyers into specific loan products, charging unnecessary fees, targeting at-risk buyers, and encouraging buyers to provide fraudulent information during the application process.
Licenses are applied for and bonds posted electronically via the Nationwide Multistate Licensing System (NMLS). Your premium for a mortgage broker bond in South Dakota will range from $188 to $375 depending on the size of your bond.
If you are engaged in the business of selling vehicles and your sales exceed five vehicles in a 12-month period, the South Dakota Department of Revenue considers you a dealer and requires you to be licensed and bonded. The amount of bond coverage needed for your dealership will depend on the type of vehicles you sell.
|Vehicle Type||Bond Amount||Annual Premium|
|New and used vehicles, mobile homes||$25,000||$250|
|Trailers (over 3,000 lbs.)||$10,000||$100|
|Motorcycles, off-road vehicles, and snowmobiles||$5,000||$100|
Auto dealers in The Mount Rushmore State can expect to pay $250 per year for a $25,000 bond policy through NNA Surety Bonds.
|Bond Name||Coverage Amount||Cost
|Appraisal Management Company Bond||$25,000||$250*||SD Dept. of Labor and Regulation|
|Building Contractor Bond||$10,000 minimum||$100*||Cities and municipalities|
|Money Lender Bond||$10,000 (first location)
$2,500 (each addition location)
|Varies*||SD Division of Banking|
|Mortgage Broker Bond||$25,000/$35,000/$50,000||$188/$263/$375||SD Division of Banking|
|Vehicle Dealer Bond||$25,000||$250||SD Dept. of Revenue|
* Cost can vary depending on the bond amount required and your credit rating
Our knowledge of South Dakota bond requirements allows us to provide accurate quotes quickly. For guidance through the process of selecting surety bonds for your business, talk to one of our experts today.