How much does a contractor bond cost in New Jersey?
The New Jersey Division of Consumer Affairs requires licensed heating, ventilating, air conditioning, and refrigeration (HVACR) contractors and electrical contractors to post a surety bond as part of the licensing process to operate in the state. Some cities and counties in the State of New Jersey require their own surety bonds. Below are the required bond amounts for popular New Jersey contractor bonds:
- Electrical Contractor Bond: $1,000
- HVACR Contractor Bond: $3,000
- Electric Generation Service Bond: $250,000
- Master Plumber Bond: $3,000
- Borough of Oakland Contractor Bond: $20,000
- Borough of Franklin Lakes Contractor Bond: $30,000
- Township of Wyckoff Contractor Bond: $10,000
The surety company issuing the bond determines your premium rate, which is the percentage of the total bond amount you pay as the premium. During the application process, the surety company evaluates your personal credit, financial statements, industry experience, and licensing history.
EZ Surety can issue premiums for New Jersey contractor license bonds for as low as $100 for applicants with standard credit. If your credit is below average, we can still offer a competitive rate for your contractors license bond.
Why are contractor bonds important in New Jersey?
Contractor license bonds hold licensed contractors accountable for the quality of their work and protect the public from damages they’ve incurred due to the contractor’s violation of licensing laws.
When the surety company issues the bond, they provide a financial guarantee to the state and local municipality that the contractor will comply with the conditions set forth in the New Jersey Contracting License Law N.J.S.A. 45:16A-1 et seq and any local regulations. If the contractor violates these regulations, causing a loss to the consumer, the consumer can file a claim against the bond.
If the claim is valid, the surety company will cover the costs to repair the damage up to the amount of the bond. The contractor is then liable to reimburse the surety company for all damages paid.
How do I get my general contractor’s license in New Jersey?
Below is a brief overview of the steps needed to obtain your contractor license in New Jersey:
- Complete and submit an application to the Division of Consumer Affairs
- Provide proof of general liability insurance
- Complete the application’s Disclosure Statement page
- Complete and submit the license application form to the New Jersey Department of Banking and Insurance (DOBI) if you offer financing.
- Pay the $110 license fee
- Submission of the appropriate surety bond
To learn more about obtaining your contractor license in New Jersey, visit the State Board of Examiners of HVACR Contractors page.