What is the New Jersey Home Improvement Contractor Compliance Bond?
What is the New Jersey Home Improvement Contractor Compliance Bond?
Newly required, beginning January 1st, 2025, the New Jersey Division of Consumer Affairs created additional licensing requirements for New Jersey home improvement contractors and home elevation contractors.
These additions include:
- A surety bond (being referred to as a compliance bond)
- General liability insurance coverage
- Insurance for elevation contractors
Let's look at what a compliance bond is and why it's being required.
What is a Compliance Bond?
A compliance bond is a surety bond.
A surety bond is a type of insurance contract you, the contractor or contracting business, is required to purchase for the protection of your customer.
It's a guarantee that you will follow through on the promises you make to your customers.
If you purposefully harm a customer by:
- Not completing a project
- Stealing from deposits
- Etc...
The customer can make a claim against this bond for financial compensation.
This applies to all New Jersey contractor bonds, not just this home improvement compliance bond.
The Home Improvement Compliance Bond Amounts
The amount you're required to purchase is going to be the smaller of these two tables.
Table 1: Current Value of an Active Contract
| Value of Current Contract | |||
|---|---|---|---|
| Current Contract Minimum Value | Current Contract Maximum Value | Bond Amount | |
| $0 | $120,000 | $10,000 | |
| $10,000 | $120,000 | $25,000 | |
| $120,000 | Unlimited | $50,000 | |
Table 2: Value of All Contracts In Previous 12 Months
| Current Value of Previous 12 Months of Contracts | |||
|---|---|---|---|
| 12 Months of Contracts Value Minimum | 12 Months of Contracts Value Maximum | Bond Amount | |
| $0 | $150,000 | $10,000 | |
| $150,000 | $750,000 | $25,000 | |
| $120,000 | Unlimited | $50,000 | |
How Much Does This Compliance Bond Cost?
I have a full breakdown of how these bonds are priced here.
But it's a credit driven bond.
This means the price will be based on a custom rate quoted from a surety (special insurance company).
This rate is determined by looking at:
- The credit history of the owner and/or owners
- Contracting history and industry experience
- Any prior bond claims if you or other owners have been licensed in the past
From these factors, the surety quotes a rate.
It's Our Job to Find You the Lowest Pricing
At Surety Bonds Direct, we work with the highest rated sureties to find you the lowest possible price and help you purchase your bond.
The rates each surety will quote is going to be different, sometimes by one to two percentage points.
Click here to see the price differences. It can be many hundreds of dollars.
Request your a price quote today by filling out our online quote form.
We'll price shop for you and you have no obligation to purchase. Nothing to lose.
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You can get instant pricing for your New Jersey ompliance bond. Click the button below. You need to know the amount of your bond.
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