Surety Bond Encyclopedia

Unlimited General Contractor ($200,000) Bond - City of Newark, DE in Delaware

Brief Summary

Newark runs its own contractor license, separate from your Delaware state business license, and a general contractor working in the city needs both. The $200,000 bond is posted in favor of the City of Newark for the unlimited general contractor category. Getting it lined up early keeps it from holding up the license or your first permit.

The City of Newark, Delaware requires a city contractor license before anyone performs building, electrical, excavation, fire protection, mechanical or plumbing work in the city. This $200,000 bond is written in favor of the City of Newark for a general contractor in the unlimited category. The license itself runs one year from issuance, costs $100, and also requires a Delaware business license and a $300,000/$500,000 liability insurance certificate naming the City.

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How to Apply for a Unlimited General Contractor ($200,000) Bond:

Get or confirm your current State of Delaware business license from the Division of Revenue.
Confirm with the City of Newark that the unlimited general contractor category and the $200,000 amount fit your work.
Have the legal business name exactly as it appears on the city contractor license application.
Complete the bond application and provide owner information for the credit review.
Pay the premium and receive the executed $200,000 bond in favor of the City of Newark.
Submit the bond with the city application, the liability insurance certificate and the $100 license fee.

Detailed Information About the Delaware Unlimited General Contractor ($200,000) Bond:

The city license is separate from the state license

The point most contractors miss is that a Delaware business license from the Division of Revenue does not let you work in Newark by itself. Section 7-1(c) of the Newark Municipal Code says no contractor shall perform any building, electrical, excavation, fire protection, mechanical or plumbing work within the city without first obtaining a contractor license from the code official. The state business license is one of the items you submit to get the city license.

What the city license requires

Under Sec. 7-1(c), the application includes the city form (a renewal invoice can substitute at renewal), a current State of Delaware business license, any required trade license, and a certificate of liability insurance of $300,000/$500,000 per accident protecting the city, its officials and employees, with the City named as certificate holder. The contractor license fee in the Sec. 7-1(b) schedule is $100. The license is valid for one year from the date of issuance and must be renewed every year. The building/code official can revoke it for violations of the building code, city ordinances or other causes the official considers justified.

What the bond does

This bond is posted by a general contractor in the unlimited category, with the City of Newark as obligee, in the amount of $200,000. It is a guarantee backed by the surety that the contractor will follow the city's building code and ordinances while licensed. If the contractor does not, a claim can be made against the bond up to $200,000, and the surety will look to the contractor to repay what it pays out.

Before you buy

The building/code official issues the city contractor license. Confirm the current bond form, the category that fits your work and the filing steps with the City of Newark before the bond is issued, so the bond is written on the right form for the right amount.

Who does not need the city license

Section 7-1(c) says the contractor license provisions do not apply to a homeowner doing work on his or her own residence, as long as no part of the structure is offered for rent.

Eligibility and Requirements for a Delaware Unlimited General Contractor ($200,000) Bond:

Bond amount of $200,000 for the unlimited general contractor category.
City of Newark named as obligee.
A current State of Delaware business license.
A certificate of liability insurance of $300,000/$500,000 per accident naming the City of Newark as certificate holder.
Annual renewal of the city contractor license, one year from the date of issuance.

Delaware Unlimited General Contractor ($200,000) Bond FAQs:

I already have a Delaware contractor business license. Do I still need a Newark license?

Yes. Newark Code Sec. 7-1(c) requires a city contractor license before any building, electrical, excavation, fire protection, mechanical or plumbing work in the city. The state business license is one of the documents you submit to get it.

Who is the obligee on this bond?

The City of Newark, Delaware. The bond is written for $200,000 for a general contractor in the unlimited category.

How long is the city license good for?

One year from the date of issuance. It must be renewed every year, and the liability insurance certificate naming the City has to be provided again at renewal or when the policy renews.

What does the city license cost?

The fee schedule in Newark Code Sec. 7-1(b) lists the contractor's license at $100. The bond premium is separate and is quoted by the surety based on the bond amount and the owner's credit and financial picture.

I am a homeowner working on my own house. Do I need this?

The city code exempts a homeowner doing work on his or her own residence from the contractor license, provided no portion of the structure is offered for rent.