CDOT right-of-way permits: the bond, the insurance, and the order you need them in

The honest answer is that most contractors call about the CDOT bond when what’s holding up their permit is the certificate, and call about the certificate when what’s missing is an endorsement that should have been on the policy in the spring. The permit office wants three things in the packet, in an order that runs backward from how most people think about it: the policy first, the endorsements on it second, the bond and the certificate last. We write excavation insurance in Colorado, and the field note below is Phil’s own access permit on US 285, so here’s what the state asks for, what a bond is and isn’t, and how to line it up before the bid closes.

First, figure out which permit you’re on

CDOT issues more than one kind of permit for work in state highway right-of-way, and they don’t all ask for the same things.

The utility permit. Installing, relocating, or repairing a utility line in the state right-of-way: a water main crossing under a highway, a fiber bore along the shoulder, a gas service tap. This is the one most utility trenching outfits pull, usually as a sub to the utility or its prime.

The special-use permit. Anything in the right-of-way that isn’t a utility and isn’t an access: landscaping in the shoulder, a temporary haul road, staging, survey work, a drainage tie-in.

The access permit. A new or changed driveway, approach, or intersection onto a state highway. A driveway approach onto US 285 for a cabin above Bailey is an access permit, and that’s the one where the bond conversation usually starts.

Ask the CDOT region permit office which permit your scope falls under before you assume. The insurance exhibit is similar across them. The bond isn’t.

The insurance the forms ask for

That structure is where the delays live, so take it apart.

Additional insured is an endorsement, not a checkbox. A certificate that says CDOT is an additional insured means nothing unless the general liability policy actually carries an endorsement that makes it so. Most permit offices know this and some ask for the endorsement page. A blanket endorsement that covers governmental entities “where required by written contract or permit” handles CDOT and every city after it. A scheduled endorsement names them one at a time. The additional insured article covers the difference, and it’s the single most common reason a certificate gets bounced.

Auto is the other half. Work in a live highway right-of-way is a traffic exposure first. The Mack dump truck backing onto the shoulder, the pickup with the arrow board, the lowboy hauling the mid-size excavator to the site. The commercial auto policy is what responds when one of them is in an accident with the public, and a personal auto policy on a work truck is where that claim goes to die.

Workers’ comp isn’t on every CDOT form, but it’s on every job. Colorado comp starts at one employee, and a permit office that doesn’t ask for it hasn’t changed the law.

The bond, and why it isn’t insurance

Here’s the part people mix up. A bond is credit, not coverage.

When CDOT asks for a performance bond on an access permit, it’s asking for a promise that the approach, the ditch, the culvert, and the pavement tie-in get built to CDOT’s spec and restored if they don’t. A surety backs the promise. If you finish the work, nothing happens and the bond expires. If you walk away or the patch fails inside the bond term, CDOT calls the surety, the surety pays, and the surety comes back to you for every dollar under the indemnity agreement you signed to get the bond.

Insurance doesn’t come back to you. Insurance pays the third party and the carrier absorbs the loss. That’s the whole difference, and it’s why the bonds page sits on this site next to the coverage pages and not among them.

Two practical things about the CDOT bond.

The surety underwrites you, not the job. Credit, financials, and how long you’ve been doing this. A new outfit with thin financials may get a small permit bond easily and a larger performance bond slowly, or with collateral. Start the surety application before you know you’ve won the bid, because you can’t rush it later.

The bond follows the permit, not the policy. Your GL renews every year. A permit bond runs for the term the permit sets and may need to stay in force through a warranty period after the work is done. Keep track of the expiration on both.

The order that actually works

Most permit delays come from doing these out of order.

1. Confirm the permit type and get the current form. Utility, special use, or access. Read the insurance and bond sections on the form the region office is using now, not the one from last year’s job.
2. Get the endorsements onto the policies. Blanket additional insured covering governmental entities, primary and non-contributory if the form asks, and the auto endorsement to match. If the GL doesn’t carry them, this is a policy change, and it takes the carrier’s time, not ours.
3. Apply for the bond, if the permit needs one. Surety application, indemnity agreement, financials. This runs in parallel with step 2 and is the long pole on an access permit.
4. Request the certificate with the permit’s exact wording. Holder name, address, additional-insured language, the permit number if the form wants it. Certificates usually go out the same business day; it depends on the carrier and on whether step 2 is already done.
5. Traffic control plan and the rest of the packet. Not insurance, but the office reads the whole packet at once.
6. Then the permit issues. And not before.

What makes the certificate part fast is having step 2 done in the spring, before any permit is on the desk. What makes it slow is asking for a certificate that names CDOT as additional insured on a policy that has no endorsement doing that. The certificates page explains what we need on a request.

City right-of-way is a different desk

A crew that cuts a state highway shoulder on Monday and a city street on Tuesday is dealing with two permit systems, and the second one changes by city.

Denver. In Denver, a DOTI Street Occupancy Permit is always required in addition to a Street Cut or Construction Permit for work in the public right-of-way. (Denver DOTI Right-of-Way Services, Street Occupancy) Two permits for one hole, and the Denver pages we’ve read don’t state a bond or insurance amount for a construction street cut, so ask DOTI what the current packet wants.

Colorado Springs. Colorado Springs requires an excavation license from the City Clerk plus a permit before anyone makes or fills an excavation in a public place; the license takes a $5,000 surety bond, a $1,000,000 commercial general liability certificate naming the City, a $110 annual fee, and completion of the Damage Prevention Safety Class. (Colorado Springs City Clerk, Excavation License (City Code § 3.3.203 referenced)) That’s a license before the permit, and the bond and certificate are tied to the license, not the job. A Colorado Springs trencher without the license isn’t getting a permit for a public-place excavation.

Aurora. Aurora's Public Improvement Permit for work in the right-of-way requires a $20,000 surety/warranty bond payable to the City, valid two years from issue, and general liability insurance of at least $400,000 per occurrence for bodily injury or death and $100,000 per occurrence for property damage, plus an approved traffic control plan for any work restricting access to the right-of-way. (City of Aurora Public Improvement Permit application (Public Works)) Different amounts, a different bond term, and a traffic control plan whenever the work restricts the right-of-way.

None of those replace the CDOT permit where the state highway starts, and the CDOT permit doesn’t replace them where it ends. A water service that crosses from an Aurora street onto a state highway needs both packets.

What we don’t control

CDOT’s current form, the region office’s turnaround, and the surety’s read of your financials. What we can do is make sure the endorsements are on the policy before a permit is on the desk, and issue the certificate with the wording the office wants once they are.

Where to go from here

If you have a CDOT or city right-of-way permit coming up, send us the permit’s insurance section and the current form. The certificates page lists what a request needs. If the endorsements aren’t on the policy yet, that’s the first fix, and it’s the one that takes the longest.

Serving businesses located in Colorado. Coverage is determined by the policy language and the carrier.