Performance and indemnity bonds may be required from the applicant of an encroachment agreement for utility installations to be placed within the limits of highway rights-of-way. The purpose of such bonds is to indemnify NCDOT for any damages within the highway rights-of-way caused by the installation.
Bonds are accepted in the following forms:
· Corporate surety bond
· Continuing indemnity bond
· Certified or cashier’s check
· Irrevocable letter of credit
Personal checks or certificates of deposit are NOT acceptable forms of bonds.
Further details for each type of acceptable bond can be found below.
Typically, the required bond amount is shown in the approved encroachment agreement. Bonds should be submitted to the appropriate District Office, based on the location of the work.
Bonds are eligible for a release a minimum of one year from the date of satisfactory completion of the work. A written request for bond release must be submitted to NCDOT with the following encroachment information included:
· Name of encroachment Applicant (second party on the agreement)
· Description of the work
· State road number(s) of road(s) on which work was performed
· County where work was performed
· NCDOT encroachment number
· Date that work was satisfactorily completed
Upon receipt of the written request for release, NCDOT personnel will perform a final inspection of the project. If all work is satisfactory, release will be authorized. If deficiencies are observed, release will be authorized when deficiencies have been addressed.
In the case of corporate surety bonds, the encroaching party is responsible for notifying the bonding company along with a copy of the encroachment authorization letter. The bonding company will then submit to the Division Engineer (or his representative) a written request for release along with a copy of the encroachment authorization letter.
In the case of certified or cashier’s checks, upon receipt of the written release request, the Division Engineer (or his representative) will notify the State Controller for release of the bond.