Delaware Contractor Bond Overview
Not every contractor in Delaware needs to be licensed, but those in some locations do. It’s important to understand that contractor bonds work similarly to insurance– but they don’t protect the contractor. Instead, contractor license bonds protect the state and consumers from wrongdoing on the part of contractors.
Surety bonds like this one represent a binding agreement, backed by a bonding company which can also be held accountable for the actions of the contractor they bond.
Keep reading for local requirements in Newark, New Castle County and Wilmington. You can also learn how to get an estimate of your bonding costs. If you still have questions, just call us at 866.450.3412.
Local Bonding Requirements in Delaware
Newark
Newark requires general contractors, subcontractors, and minor renovations contractors to obtain surety bonds in varying amounts based on the license type and the amount of work they perform.
New Castle County
Contractors with classifications Class A, B, C and U need to get bonded. There are also requirements for master HVACR contractors, master plumbers, sewer and drainage cleaners, decorative appliance and outside utility contractors, as well as third party inspectors.
Wilmington
The city of Wilmington has a bonding requirement for plumbers and contractors working on public streets, curbs and sidewalks.
Non-residential Contractor Bonds
Contractors whose residency is not in Delaware, but would like to perform work in the state, will also need to furnish a contractor bond in the amount of 6% of their contract in the state.
Read for information on bonding costs.
Delaware Contractor Bond Cost
Each contractor license bond has a different total amount, referring to its penal sum. If your bond is valued at $100,000 and there’s a claim against you, you may be liable for up to $100,000.
However, to get bonded, you only need to pay a small premium on that amount. There are a number of factors that determine your premium. Among these are your credit report, the age of your business, and the strength of your financial profile. Undoubtedly, your personal credit score plays the biggest role. Contractors with a score above 700 can pay as little as 1% of the total value of the bond, while those with scores below 600 can see their premiums rise to 5%.
| Bond Type | Surety Bond Amount | Above 700 | Between 650-699 | Between 600-649 | Below 599 | |
|---|---|---|---|---|---|---|
| Wilmington | ||||||
| Contractor Bond | $3,000 | $100 | $100 | $100-$120 | $100-$150 | |
| Newark | ||||||
| Bond Type | Surety Bond Amount | Above 700 | Between 650-699 | Between 600-649 | Below 599 | Minor Renovation Contractor Bond (Projects below $25,000) | $10,000 | $100-$200 | $150-$300 | $200-$400 | $300-$500 |
| Minor Renovation Contractor Bond (Projects between $25,000 and $75,000 | $25,000 | $250-$500 | $375-$750 | $500-$1,000 | $750-$1,250 | |
| General Contractor Bond (Projects below $100,000) Limited Subcontractor Bond for HVAC, Fire, Plumbing and Mechanical contractors |
$50,000 | $500-$1,000 | $750-$1,500 | $1,000-$2,000 | $1,500-$2,500 | |
| General Contractor Bond (Projects between $100,000 and $250,000) | $75,000 | $750-$1,500 | $1,125-$2,250 | $1,500-$3,000 | $2,250-$3,750 | |
| General Contractor Bond (Projects between $250,000 and $500,000) | $100,000 | $1,000-$2,000 | $1,500-$3,000 | $2,000-$4,000 | $3,000-$5,000 | |
| Limited General Contractor Bond (Projects above $500,000 and $999,999.99) | $150,000 | $1,500-$3,000 | $2,250-$4,500 | $3,000-$6,000 | $4,500-$7,500 | |
| Unlimited General Contractor Bond (Projects above $1,000,000) Unlimited Subcontractor Bond for HVAC, Fire, Plumbing and Mechanical contractors |
$200,000 | $2,000-$4,000 | $3,000-$6,000 | $4,000-$8,000 | $6,000-$10,000 | |
| Newcastle County | ||||||
| Bond Type | Surety Bond Amount | Above 700 | Between 650-699 | Between 600-649 | Below 599 | |
| Sewer and Drain Cleaner Bond Decorative Appliance Contractor Bond Master Plumber Contractor Bond |
$10,000 | $100-$200 | $150-$300 | $200-$400 | $300-$500 | |
| Master HVACR Bond Class C Building Contractor Bond |
$25,000 | $250-$500 | $375-$750 | $500-$1,000 | $750-$1,250 | |
| Outside Utility Contractor Bond Class B Building Contractor Bond |
$50,000 | $500-$1,000 | $750-$1,500 | $1,000-$2,000 | $1,500-$2,500 | |
| County Class A Building Contractor Bond | $150,000 | $1,500-$3,000 | $2,250-$4,500 | $3,000-$6,000 | $4,500-$7,500 | |
| Class U Building Contractor Bond | $200,000 | $2,000-$4,000 | $3,000-$6,000 | $4,000-$8,000 | $6,000-$10,000 | |
The provided values are only estimations. Check out our surety bond cost guide for more information on premiums, or submit our online application to get an exact quote.
Bonding Process with Bad Credit
Low credit score, no credit history, or past due items in your report can all be red flags for underwriters. They will result in higher premiums, but luckily, they usually won’t be a barrier to getting bonded.
There are two exceptions. Applicants going through a bankruptcy and those late on child support payments will not be able to bonded. Once you close the bankruptcy or catch up on your child support payments, you can reapply.
Start Your Contractor License Bond Application Today
We’ve made our online application simple and convenient. It’s one page long and takes just a minute to finish. If you provide ownership information during the online application, you’ll be even closer to finalizing your bond in no time.
We will send you a free bond quote via email, and take you through the rest of the process. We have bond forms on file so we can do most of the paperwork for you. Afterwards, we’ll send you a digital copy as soon as we get the bond signed by the surety. You will receive the original bond form at the address you’ve provided.
Staying out of Bond Claims
All of these bonds are designed to protect the public and the state. Any fraudulent action, violation of the building code, or other forms of non-compliance with applicable regulations can land you into trouble.
If a bond claim is filed, you need to promptly pay it so it doesn’t hurt your record. If you don’t pay it, however, the surety bonds company will have to provide the compensation for you and then seek reimbursement from you via legal means. It’s not advisable to reach that stage of the dispute because it can harm your reputation, cost you more, and prevent you from getting bonded in the future.
There are cases when the claim is groundless, however, so you can still go to court over it. If you choose that scenario you need to build your case well by keeping all communication with the claimant and other affected parties well-documented. If you present it to the surety and have a convincing case, they can help you with advice and legal assistance.
