Quick Facts:

  • Regulating Agency: Delaware Division of Revenue (for non-resident contractors) and local licensing authorities
  • Required Bond Amount: Varies by jurisdiction and contractor type ($3,000 – $200,000)
  • Cost Range: $100 – $10,000+ annually (depending on credit)
  • Required For: Non-resident contractors, general contractors in some localities, and specialty trades (plumbing, HVAC)

What Is a Delaware Contractor License Bond?

A Delaware contractor license bond is a surety bond that guarantees contractors will comply with state laws, local building codes, and regulations. It serves as financial protection for government entities and consumers if a contractor violates licensing laws, fails to pay taxes, or performs substandard work. Unlike project-specific bonds, these bonds are tied to the contractor’s license and must be maintained as long as the license is active.

Who Regulates Delaware Construction Contractor Licensing?

  • State Level: Delaware Division of Revenue (Department of Finance) regulates non-resident contractor bonds
  • County Level: New Castle County Department of Land Use for unincorporated areas
  • Municipal Level: Various city departments including Wilmington Department of Licenses and Inspections, Newark Code Enforcement Division, and Dover Licensing/Inspections Division
  • Official Sites:

What Bond Amount Is Required in Delaware?

Bond requirements vary significantly across Delaware:

  • State Level (Non-Resident Contractors): 6% of contract price for projects $20,000 or more
  • New Castle County:
    • Class U (Unlimited) Building Contractor: $200,000
    • Class A Building Contractor: $150,000
    • Class B Building Contractor: $50,000
    • Class C Building Contractor: $25,000
    • HVACR Contractor: $25,000
    • Master Plumber/Sewer and Drain Cleaner: $10,000
    • Decorative Appliance Contractor: $10,000
    • Outside Utility Contractor: $50,000
  • City of Wilmington:
    • Master Plumber: $3,000
    • Street/Sidewalk Contractor: $3,000
    • HVAC Contractor: $3,000
  • City of Newark:
    • Unlimited General Contractor: $200,000
    • Limited General Contractor: $150,000
    • General Contractor: $100,000 (smaller projects: $50,000-$75,000)
    • Unlimited Subcontractor: $200,000
    • Limited Subcontractor: $50,000
    • Minor Renovation Contractor: $10,000-$25,000
  • City of Dover:
    • No general contractor bond requirement
    • Master Plumber: $5,000
  • Other Municipalities:
    • Sussex County Plumbing Contractor: $5,000
    • Rehoboth Beach Plumber: $2,000
    • Seaford Master Plumber: $5,000

How Much Does a Contractor Bond Cost in Delaware?

  • Pricing Range: Premium costs typically range from 1% to 10% of the bond amount annually
  • Examples:
    • $3,000 bond: $100-$300 annually
    • $25,000 bond: $250-$2,500 annually
    • $150,000 bond: $1,500-$15,000 annually
  • Factors Impacting Cost:
    • Credit score (most important factor)
    • Business financial strength
    • Years in operation
    • Industry experience
    • Prior claims history
  • Credit Requirements:
    • Excellent credit: Expect rates around 1-3%
    • Fair credit: Rates typically 3-5%
    • Poor credit: Rates may range from 5-10% or higher
    • Most surety companies impose a minimum premium of around $100

Who Needs a Contractor License Bond in Delaware?

  • Non-resident contractors working on projects valued at $20,000 or more
  • New Castle County contractors (all classes) working in unincorporated areas
  • Newark contractors (all types, with bond amounts based on project value)
  • Plumbing contractors in most jurisdictions (Wilmington, Dover, Sussex County, etc.)
  • HVAC contractors in certain municipalities including Wilmington
  • Contractors working on public rights-of-way (streets, sidewalks) in Wilmington

What Other Contractor Bonds Are Required in Delaware?

While license bonds are the focus for getting licensed, contractors may also need:

  • Performance bonds for public works projects
  • Payment bonds for certain government contracts
  • Maintenance bonds for infrastructure projects
  • Street opening bonds for utility work

Additionally, contractors should maintain:

  • General liability insurance
  • Workers’ compensation insurance
  • Commercial auto insurance

How Does ContractorNerd’s Application Process Work?

  1. Complete our simple online application
  2. Receive a quote (often instantly for smaller bonds)
  3. Review and accept the terms
  4. Make payment
  5. Receive your bond (typically electronically)
  6. Submit the bond to the appropriate licensing authority

The entire process is streamlined and can often be completed in under 24 hours.

How Quickly Can I Purchase a Bond?

For most Delaware contractor bonds, you can receive a same-day quote and bond delivery. Smaller bonds ($25,000 or less) can frequently be approved instantly with electronic delivery. Even larger bonds can usually be processed within 1-2 business days if you have all required documentation ready.

Who Files the Bond With the DE Once It Is Purchased?

After purchasing your bond, you (the contractor) are responsible for filing it with the appropriate licensing authority. The bond will be issued directly to you, and you’ll need to include it with your license application or renewal. Our partner can provide guidance on the filing process if needed, but the contractor must ensure proper submission to authorities like:

  • Delaware Division of Revenue (for non-resident contractor bonds)
  • New Castle County Department of Land Use (for county bonds)
  • City licensing departments (for municipal bonds)

How Are Claims Handled on a Delaware Contractor Bond?

If a contractor violates applicable laws, building codes, or fails to pay required taxes:

  1. The government entity or affected party files a claim with the surety company
  2. The surety investigates the claim
  3. If valid, the surety pays the claim up to the bond amount
  4. The contractor must reimburse the surety for all paid claims plus legal costs

Remember: The bond protects the public, not the contractor. As the bonded contractor, you remain fully liable for all claims paid by the surety.

Frequently Asked Questions (FAQ)

Can I get a bond with bad credit?
Yes, contractors with less-than-perfect credit can still obtain Delaware contractor bonds. While you’ll likely pay higher premiums (5-10% rather than 1-3%), specialized surety providers can work with most credit situations. For larger bonds, providing strong financial statements or collateral may help secure approval.

What are the penalties for working without a required bond?
Operating without a required contractor bond in Delaware can result in:

  • License suspension or revocation
  • Stop-work orders
  • Monetary fines
  • Ineligibility for future permits
  • Potential legal action from regulatory authorities

How does bond renewal work?
Most Delaware contractor bonds must be renewed annually, typically aligning with your license renewal period. You’ll receive a renewal notice from your surety company before expiration. Your premium may change at renewal based on updated credit information and claims history.

What’s the difference between a bond and insurance?

  • A bond primarily protects the public and government authorities from contractor non-compliance
  • Insurance protects the contractor from specific risks and losses
  • Bond claims must be repaid by the contractor; insurance claims typically do not
  • Both are essential components of a contractor’s risk management program

Ready to Get Your Delaware Contractor License Bond?

Apply Now to receive a free, no-obligation quote through our online system.