How to Get a Delaware Contractor License
Contractors in Delaware who would like to execute work valued at more than $50,000 have to get a state license.
The licensing authority is the Division of Revenue, which requires construction specialists to meet a number of prerequisites. Most importantly, you need get a contractor license bond prior to obtaining your legal right to operate.
Here is what you need to keep in mind before you start your licensing as a contractor in Delaware.
Choose your type of Delaware contractor license
If you would like to operate as a general or prime contractor or subcontractor, you will need to get a Delaware general contractors license. It is suitable for construction specialists who are based in the state, and thus is called a resident license.
In case you are not located in Delaware but want to execute the same kind of work as mentioned above, you will need to obtain a non-resident building trades contractor license. While most licensing requirements are the same for residents and non-residents, there are a few different ones that will apply for you. For both types, the licensing body is the Department of Revenue.
Electricians have to go through a licensing process with the Board of Electrical Examiners at the Division of Professional Regulation. The requirements you need to meet for each license type are different.
Undergo the licensing procedure
Depending on the type of license you need, you will have to complete a different application form. If you are a resident of Delaware, you need to submit the completed Resident Contractors Package. For non-residents, the correct form is the Non-Resident Contractors Package.
For both license types, you first have to fill in the Combined Registration Application. There you have to present information about yourself and your business entity. If your activities are mainly in Delaware, you will need a separate business license. You can obtain it via the One-Stop Business Registration and Licensing System page.
Resident and non-resident contractors alike have to provide the following paperwork:
- Department of Labor Form UC-1
- Workers’ compensation insurance in case you will have employees
- Division of Revenue Form 5060, Statement of Contractors Awarded by General Contractors and Subcontractors if you are planning to work as a subcontractor
- Industrial Accident Board Form
- Proof of fee payment – $75 per year
Non-resident contractors also need to provide a surety bond. The licensing period runs for one year until December 31st of each year.
As for electricians, you need to complete another application form and submit it to the Board of Electrical Examiners. You need to show proof of your experience in the trade, purchase a general liability insurance of $300,000 and pass any needed examination. That’s how you can obtain your Delaware electrical contractor license.
Last but not least, you may need to provide a Delaware contractor bond.
On the state level, only non-residential building contractors in Delaware are required to get an additional security in the form of a contractor license bond or an irrevocable letter of credit. Its purpose is to protect the state and its citizens from any potential fraud, misuse or failure to complete contracted work. You have to submit the bond in the official form. The bond amount depends on total amount of contracts above $20,000 that you have. You need to provide a bond that is equal to 6% of this amount.
There are also local bonding requirements, which you may have to comply with depending on your location.
Plumbers and contractors working on public streets, curbs and sidewalks in the city of Wilmington have to post a $3,000 bond.
In Newark, there are the following bond requirements:
- minor renovation contractors – $10,000 bond for projects below $25,000 and $25,000 bond for projects between $25,000 and $75,000
- general contractors – $50,000 bond for projects below $100,000, $75,000 bond for projects between $100,000 and $250,000, $100,000 bond for projects between $250,000 and $500,000, $150,000 bond for projects between $500,000 and $1 million, and $200,000 bond for projects above $1 million
- HVAC, fire, plumbing and mechanical contractors – $50,000 bond for limited licensees and $200,000 bond for unlimited
In Newcastle county, you may need to meet the following bonding criteria:
- sewer and drain cleaners – $10,000 bond
- decorative appliances contractors – $10,000 bond
- master plumbers – $10,000 bond
- master HVACR specialists – $25,000 bond
- outside utility contractors – $50,000 bond
- building contractors – $25,000 bond for Class C, $50,000 bond for Class B, $150,000 bond for Class A, and $200,000 bond for Class U
The surety bond price that you have to pay to get bonded, however, is only a fraction of the bond amount you need to post. The bond premium is typically between 1% and 5% of the required bond sum. If you need to post a $10,000 bond, for example, your bond cost can be between $100 and $500. The exact price is formulated on the basis of your personal and business finances’ strength.
Have questions about the bonding process or your bond application? Don’t hesitate to reach us at 877.514.5146. Our experts will help you out.