Delaware Contractor License Bonds

Get Your Delaware Contractor Bond

Who Is Required To Purchase a Delaware Contractor Contractor Bond

Out of State Contractors

Out of state contractors who get licensed to perform projects in Delaware are required to purchase a contractor bond in the amount of 6% of the amount of the contract or contracts (including subcontracts) if:

• The single contract totals $20,000 or more
• The contract is a "cost-plus" contract with an estimated cost-and-profit totally $20,000 or more
• The aggregate of two or more contracts in a calendar year totals $20,000 or more

Municipal Bonding Requirements

Different cities may have a bonding requirement depending on the project and the type of contractor license or permit required.

These requirements are unique across the state based on the jurisdiction and type of project. You'll be notified of these additional bonding requirements when you apply for the necessary permits to begin work on the project.

Examples of cities where we have helped contractors:

• City of Newark
• New Castle
• Wilmington

These local requirements are a mix of bonds like:

• Contractor license bonds
• Concrete permit bonds
• General contractor bonds
• Landscape contractor bonds
• Electrical contractor bonds
• HVAC contractors bonds

Here Are Municipal Contractor Bond Amounts?

New Castle Contractor Bond Amount

City of Newark Contractor Bond Amounts

Wilmington Contractor Bond Amounts

Why is a Delaware Contractor Bond Required?

The state of Delaware and local cities require contractors to obtain licenses to demonstrate:

• A minimum level of experience
• The necessary level of education
• The proper business records are submitted
• An appropriate license type for the projects they want to bid on

These licensing agencies exist to protect the public from unlawful contractors. They want contractors who provide a good service and make their local communities a better place to live. Plus customers want to know they're protected if a contractor defrauds them.

Other than the licensing process itself, the surety bond is the primary way these licensing agencies can hold contractors accountable to follow the law and perform services according to the contracts they sign.

Numerous instances of contractors breaking contracting building codes and/or cheating their customers is why these agencies implemented a bonding requirement.

What Does a Delaware Contractor License Bond Protect Against?

Contractor bonds (regardless of license type) serve the same purpose of making sure projects are completed according to Delaware building codes and the contract signed with customers.

It's unfortunate, but every year there will be a handful of contractors who purposefully:

• Violate the terms of a construction project
• Take deposits or down payments and never start or complete the project
• Replace agreed upon materials with cheaper alternatives to increase profits
• Fail to pay subcontractors for completed work
• Neglect building codes and purposefully perform poor quality work

Purposeful and fraudulent actions like these are what a contractor license and/or permit bond protect against.

If a contractor is found guilty of any of these actions, a claim can be made against the contractor license bond or permit for financial repayment, but only up to the bond amount.

How Much Does a Delaware Contractor Bond Cost?

At a high level, the cost of a contractor bond is based on a rate quoted from a surety.

A surety is an insurance company that underwrites the surety bond. Each surety conducts their own independent analysis of the applicant to determine a rate. Their analysis takes into consideration (among other factors):

• Personal credit of the owner or owners
• Contracting experience and industry experience
• Any prior bond claims if you or an owner has been licensed in the past

Using a surety agency like Surety Bonds Direct can help:

• Save you money (potentially hundreds of dollars)
• Ensure your bond is written by an A rated surety
• Mange the bonding and renewal process for you

Most Delaware contractor bonds, including New Castle, Newark, Wilmington and others can be purchased with a low fixed price if the bond amount is lower than $25,000.

This allows you to:

• Skip having your credit pulled
• Speed up the bond purchase process

Click here and get your instant price by using our free online quote tool. It only takes 90 seconds to get your pricing.

Contractor Bond Amounts Over $25,000

Many of the Delaware, New Castle, and Newark contractor bonds have coverage amounts over $25,000.

These bonds require a custom quote and underwriting process. Remember, this means the surety will need:

• Personal credit of the owner or owners
• Contracting experience and industry experience
• Any prior bond claims if you or an owner has been licensed in the past

And this where we can save you hundreds of dollars by price shopping for you and delivering the lower possible rate and price.

For example, let's look at the Class B Building Contractor bond in New Castle. This bond has a $50,000 bond amount.

The rates in the table below are from really good to average:

These are only examples. Get your free price quote. It costs you nothing to have us price shop for you. And once you get pricing, you're under no obligation to purchase.

What Happens After You Purchase Your Bond?

After you purchase your bond, Surety Bonds Direct's issuing department will prepare your bond with the correct signatures, notarized seals, and the required power of attorney.

Most Delaware bonds can be emailed to you making the process faster. If the agency requiring the bond wants the original bond, we can mail it to you. Make sure you account for shipping time.

Determining the Contractor Bond Term and Renewal

• Bond Term: the length of time the bond is active
• Effective date: the date you choose when purchasing your bond that signifies your bond active date
• Expiration date: the date your bond must be renewed by to remain active
• Renewal premium: The premium (payment) required to keep your bond active

Nearly all Delaware contractor bonds and local bonds have a 12 months from the effective date.

Continuous Bond vs New Bond

A continuous bond means the original bond remains active as long as you pay the renewal premium. You don't have to do anything extra.

Most Delaware contractor bonds are continuous.

Renewing Your Bond

Your Surety Bonds Direct bond specialist will reach out to you 30 to 45 days in advance of your renewal date to make paying the renewal premium easy.

Once you pay the renewal premium your bond is activated for the next term.

If your bond is a performance or permit bond, you may not have to renew it. These bonds are purchased for the length of a project.

If the project extends beyond the expiration date, you will be required to renew it. If the project ends before the expiration date, you can let the bond expire on it's own.

Contractor Bonds And Getting Your Delaware Business License/Registration

Here are the important links for getting licensed in Delaware.

• City of Newark building permits
• New Castle contractor licensing
• Wilmington construction and development
• Delaware contractor registration
• Delaware Department of Revenue

Additional Delaware Contractor Bond Resources & Links

Non-Resident Contractor Bond Form