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New Jersey Contractor License Bond

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What is a New Jersey Contractor License Bond?

Unlike many other states, construction contractors in New Jersey do not have to secure a statewide license in order to perform work legally. However, some municipalities do require contractors to get a license as well as a surety bond, known as a New Jersey contractor license bond. A New Jersey contractor license bond is a form of insurance for a contractor's customers, not the contractor himself.

If a licensed contractor has a bond and work performed on a contract does not go as planned, or it is not in accordance with local codes and regulations, a claim can be made against the bond. Claims against a New Jersey contractor license bond are meant to cover financial damages incurred by a contractor's customers.

Who Needs a New Jersey Contractor License Bond?

In the state of New Jersey, local licensing agencies dictate which contractors need a license and a corresponding contractor license bond. City contractors working in Jersey City and Ventnor city are required to have a New Jersey contractor license bond, as are street opening contractors working in Burlington.

The state of New Jersey may also require a bond of contractors wishing to become a master plumber or electrician.

New Jersey Contractor License Bond Obligee Details

A New Jersey contractor license bond is an agreement between three different parties. The surety company provides the bond to the licensed contractor, known as the principal of the bond. The local licensing authority is listed as the obligee of the bond, or the one mandating a bond be posted by the principal.

Because bond requirements are set by local licensing authorities and not the state as a whole, the obligee of a New Jersey contractor license bond varies from one jurisdiction to the next. Check with the local licensing authority to determine if a bond is required and who is to be listed as the obligee.

How Much Does a New Jersey Contractor License Bond Cost?

Similar to other types of surety bonds, a New Jersey contractor license bond is priced based on the amount of the bond and the credit history of the principal. Bonds for contractors in the state may be as low as $4,000, but some may be up to $15,000, depending on the type of license a contractor holds. Fortunately, a licensed contractor does not pay this bond amount out-of-pocket.

The bond price paid by the contractor is known as the bond premium. It is calculated as a percentage of the total bond amount to be secured, ranging from 1 to 10% in most cases. The surety company reviews a contractor's credit history and financial track record to determine what the bond premium will be. Contractors with bad credit can still get a New Jersey contractor license bond, but the cost may be higher than someone who has a clean financial past.

How do You Get a New Jersey Contractor License Bond?

To get a New Jersey contractor license bond, contractors should submit a brief application and quote form online. The surety company will need details about the bond amount and the type of bond requested, and a quote can be provided in most cases in a matter of minutes. Once the bond is in place and the bond premium paid, contractors should ensure their bond is renewed to stay in compliance with local laws and regulations.


Frequent Questions

How much does a bond cost?

Pricing is a percentage of the contractor license bond amount that’s required of you, which is based on your personal credit. Use our bond pricing tool to to get a quick ballpark estimate.

Can I get bonded with bad credit?

Yes. You can apply and get bonded with bad credit. Our agency is the largest writer of bonds in the county, which allows us to approve contractors for bonds when other agencies cannot.

Are these the same as contract bonds?

No. Contractor license bonds ensure you will abide by the laws of your state, city or municipality when performing contracting work. Contract bonds guarantee public projects will be completed properly and are a separate bond type. You can learn more about contract surety bonds by visiting the contractor bond center.

Do I need a state or local bond?

It depends on who is requiring the bond of you, the local municipality, county or state. Depending on your location, it is possible you may need both a local and state bond, as contractor license bond requirements can vary drastically. You can select your state to see a full list of contractor license bond requirements.


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Our company has been with JW Surety for several years now so when we needed to obtain a bond for a new company, we immediately went to them for help. Our rep, Melissa, was extremely helpful and prompt which made the process extremely easy for me.
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Trying to get a local Surety Bond was like driving a car on three tires. I searched Surety Bonds and found JW Surety Bonds. I got online and filled out the information and with in 30 minutes received a response from Melissa. She was informative, friendly and helpful. One more super satisfied customer.

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About JW Surety Bonds
We are a family owned and operated agency established in 2003. We started with just two people, and grew to become the largest volume bond producer in the nation with 50+ employees. Since day one, our team focus has been on providing real-time online quotes, an easy process, and the best in claims defense. Learn more about our company.