New Jersey Contractor License Bond Requirements
Unlike many other states, New Jersey doesn’t have a statewide requirement for all contractors to be bonded. However, some contractor classifications in several cities are still required to get a bond.
Contractor license bonds are a type of surety bond, i.e. an agreement between three parties:
- A contractor (principal)
- A state agency (obligee)
- A bonding company (surety)
It’s the surety that underwrites the bond and vouches for the principal, so that they will be granted a license. In other words, the surety becomes legally and financially responsible if the principal does not adhere to the terms of the bond. This means that in order to stay out of claims, contractors should pay attention to all applicable state and local building codes and pay their taxes on time.
Consult the sections below to find out which cities require the bond, how to calculate your costs, and what to expect during the application process.
Questions about Contractor License Bonds in New Jersey
Where do NJ contractors need to get bonded?
A contractor license bond is required in these locations:
- Jersey City
- Ventnor City
Furthermore, the Board of Master Plumbers requires that all plumbers in the state post a surety bond, known as a plumber’s license bond. Read on to find out more about bond amounts and cost.
How much does a New Jersey contractor license bond cost?
The contractor license bond has a different value depending on the location and the license type. The bond amount is the maximum protection the surety can extend to claimants for proven claims. However, the cost for contractors is just a fraction of that amount, paid in annual or sometimes biennial premiums. Take a look at the table below for more detailed information about the contractor license bonds' costs in the locations requiring it in New Jersey:
|Location||License Type||Surety Bond Amount||Credit Sore|
|Above 700||Between 650-699||Between 600-649||Below 599|
|Jersey City||Contractor License Bond||$15,000||$112-$225||$150-$375||$375-$750||$750-$1,500|
|Burlington||Street Opening Bond||$5,000||$100||$100-$125||$125-$250||$250-$500|
|Ventnor City||Contractor License Bond||$4,000||$100||$100||$100-$200||$200-$400|
|Statewide||Plumber License Bond||$3,000||$100||$100||$100-$150||$150-$300|
As you can see from the table, the higher your personal credit score, the lower your premium is likely to be. However, credit score isn’t the only factor that surety underwriters may want to take a look at. Other items in your credit report, your business’ age, and your financial stability may also be considered.
To find out more, check out our What Does a Surety Bond Cost? Page.
Can I get bonded if I have bad credit?
Although the importance of your credit score (and that of all owners, if you are not the sole proprietor) is undoubtedly great, in most cases you will still be able to get bonded even if your credit score is low.
In general, premiums rarely go past 10%, even for applicants with bad credit. However, if you are getting a premium you feel is too high, feel free to talk to one of our agents and they can provide some insights on how to strengthen your application.
Find out more about bad credit surety bonds on our dedicated page.
How do I apply for my contractors license bond?
To apply for your contractors license bond, all you have to do is submit our online application. We have all the bond forms on file, so we’ll do most of the paperwork for you.
The steps involve providing ownership information, obtaining a quote, signing an indemnity agreement with the surety, and paying for your bond. Once all the steps are completed, normally the bond will be issued within 1-2 business days.
How do I get a NJ contractors license?
Again, unlike many other states, there is no statewide licensing board in New Jersey. This means that each contractor classification will have to first find the relevant local licensing authority, and verify its licensing requirements.
Regardless, if you want to perform work on public construction projects, you will need a registration with the Department of Labor and Workforce. Keep in mind that some types of public work will also require surety bonds, known as contract bonds.
Still Have Questions? Check Our FAQ Pages
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