Delaware Contractor Surety Bond

What is a Delaware contractor surety bond?

Throughout Delaware, contractors must post a bond in order to be licensed within the specific county or city where they accept contracts. For example, Newark City and New Castle County have their own licensing and bond requirements for contractors.

In general, a surety bond acts as a contract between three parties:

• The surety: this is the issuer of the bond, such as NNA Surety Bonds
• The obligee: this is a state or local agency requiring the bond
• The principal: the contractor who is posting the bond

A bond is not an insurance policy. Where insurance protects you and your business, a bond policy helps protect your clients and the county or city.

How much does a contractor bond cost in DE?

The cost of your contractor bond will depend on your location in Delaware. Each county or city may require different bond amounts. In addition, the bond amount will vary based on the type of work and the amount of work you conduct. For example, in New Castle County, the amount of your bond can range from $25,000 to $200,000 for building contractors, depending on the maximum project valuation allowed by your license.

Regardless of your bond's value, you will only have to pay a percentage of the bond as an annual premium. Your premium can range from 1% to 15% of the bond’s value based on your credit rating and your business finances.

NNA Surety Bonds currently offers contractor bonds in New Castle County and Newark City. Below you can find a price breakdown for contractor bonds in these locations.

*Cost can vary depending on the bond amount required and your credit rating.

Get your Delaware Contractor Bond.

Why do Delaware contractors need a surety bond?

Many counties and cities throughout Delaware license and regulate contractors. They do this in order to protect consumers and to help promote lawful practices, in accordance with local regulations, by contractors. A surety bond is commonly required as part of your licensing.

The purpose of your contractor bond is to protect your clients in the event you are unable to complete a contracted job or otherwise act unlawfully.

In this event, a claim can be made against your bond. If the claim is upheld, your bond is used to reimburse your client and to pay any outstanding fines issued by the city, county, or state. Afterward, you will be required to pay this amount back to the surety.

Upheld claims make it difficult to obtain future bonds, thus jeopardizing your business. In this way, a bond helps encourage contractors to complete contracts and to do so in full accordance with local codes and regulations.

Learn more about contractor license bonds.

Getting a Delaware contractor license bond

You can apply for your contractor license bond from a bonding company like NNA Surety Bonds. A licensed insurance agent can walk you through the process and answer any questions you have.

Check with your county and city regulations to see what bond amount is required. Or, contact NNA Surety Bonds to discuss your needs.

Questions? Call NNA Surety Bonds at 855-215-2160.