Delaware Surety Bonds

Surety bonds can be divided into three main categories:

• License and permit bonds are the largest category of bonds and, as their name implies, they are required when your business is obtaining a business license or permit.
• Contract bonds are required from construction contractors in certain scenarios– most often when they work on public projects, and the government requires them as a way to protect their investment. These should not be confused with contractor license bonds, which many states require when contractors apply to get licensed.
• Court bonds are required under specific circumstances, such as when someone wants to appeal a court decision.

Before you can calculate your costs of getting bonded, you need to know what the total amount of the bond is. This amount refers to the maximum coverage of the bond. For example, for Delaware auto dealer bonds this amount is $25,000.

You pay only a fraction of that amount to get bonded, known as the bond premium. Premiums are most frequently paid on an annual basis, and less frequently once every two years. The exact percentage is determined only after you submit your application, but it should vary between 1% and 3% in cases where the applicant has good credit. Using the dealer bond example once more, this translates into annual payments of between $250 and $750.

Your financial statements, citizenship status, and even your resume can also influence your premiums. Learn more about it on our “What Does a Surety Bond Cost?” page.

While it is certainly true that your credit score plays an important role in determining your premium, in most cases it will not prevent your from getting bonded.

For license bonds, we have an approval rating of 99% and premiums generally vary between 4% and 15%. Most types of bad credit surety bonds will not call for a co-signer, nor require posting collateral.

Obtaining contract bonds, on the other hand, isn’t usually possible for applicants with bad credit. The project amounts of contracts most frequently requiring these bonds are simply too high, so bonding companies are unwilling to undertake the risk.

To get a surety bond in Delaware simply fill out the online application to get started.

The application process varies slightly based on the exact type of surety bond you need. Some bonds are subject to underwriting considerations, while others don’t even require a credit check.

Most bonds, however will require that the surety looks into your credit report and that you sign an indemnity agreement, guaranteeing the underwriter that you will reimburse them for all losses incurred by any claims you trigger.

For contract bonds, posting personal financial statements, as well as income statements and balance sheets, is obligatory. You can sometimes submit these for a license bond application as well, because strong financials and balance sheets may reduce your premium.