New Jersey Contractors License Bonds (Electrical & HVACR)

Get Your New Jersey Contractor Bond

Who Is Required To Purchase a New Jersey Contractor License Bond

New Jersey Division of Consumer Affairs has different boards and committees with licensing requirements specific to contractors in the state. These are:

• Home improvement and home elevation contractors
• Electrical contractors
• Plumbing contractors
• HVAC contractors
• Elevator, escalator, and moving walkway contractors

All newly licensed contractors performing work in these areas are required to purchase a contractor bond before a license will be issued.

Each license is independent. This means if you obtain an electrical license and you do work in home improvement, you will have to satisfy the bonding requirements for both of these disciplines.

 

New Home Improvement and Home Elevation Contractor Surety Bond

As of 2024, the Contractors; Business Registration Act has been amended to require contractors engaged in home improvement and/or home elevation projects to purchase a surety bond.

The amounts of this bond are listed below, but the bond amount will depend on the value of contracts in the previous 12 months.

 

County and Local Bonding Requirements

Here at Surety Bonds Direct, we have not come across many county or city contractor license bonding requirements. However, this does not mean they may not exist for the city you're doing work in.

If you're required to purchase a license bond in a city where a project is located, we can help you fulfill that bonding requirement. Just fill out our online quote form and tell us the city where you need the bond.

You can also call a bond specialist at 1-800-608-9950 to speak with a real person.

 

Permit, Right of Way, and Performance Bonds

In the construction space, there are a number of different bond requirements.

If you're bidding on state, county, or city level government projects you'll likely be required to purchase a right or way bond. This is a bond that ensures you'll complete projects and restore public property like sidewalks back to working order.

If you're taking on private projects, you may have to purchase a:

• Bid bond
• Performance bond
• Payment bond

These are called construction bonds. Click on each one to learn more.

 

Why is a New Jersey Contractor Bond Required?

New Jersey (like most states) requires individuals who want to offer contracting services to be licensed through the Division of Consumer Affairs.

The licensing process ensures each contractors will:

• Follow the laws of their specific license
• Record the proper business records
• Select the appropriate license types for the projects they want to bid on
• Pay all the required fees for obtaining their license

Part of the licensing process is the bonding requirement (or requirements).

The surety bond is the primary way the Division of Consumer Affairs and customers can hold a contractor accountable to the promises they make on projects.

The bond requirement is for your customers' protection.

 

What Does a New Jersey Contractor License Bond Protect Against?

Despite the licensing process and requirements, every year there will be a small handful of contractors who purposefully and financially harm their customers to make more money.

Examples of these fraudulent actions can include:

• Breaking the terms of a construction project
• Altering contract terms without the customers knowledge
• Taking deposits or down payments and never starting or completing a project
• Replacing agreed upon materials with cheaper alternatives to increase profits
• Failing to pay subcontractors for completed work
• Neglecting building codes and purposefully performing poor quality work

If a customer falls victim to these scenarios or similar, they can make a claim against the contractor license bond for financial compensation. However, the claim can only go up to the amount of the bond. And this is why the bond amount is so important.

What are the New Jersey Contractor Bond Amounts?

Here are the bond amounts based on the New Jersey classifications that are required to purchase a contractor bond.

 

Home Improvement and Home Elevation Contractors

• $50,000 for contracts valued at more than $120,000... or... the sum of contracts from the previous 12 months valued at a minimum of $750,000
• $25,000 for contracts valued between $10,000 and $120,000... or... the sum of contracts from the previous 12 months valued at between $150,000 and $750,000
• $10,000 for contracts valued less than $10,000... or... the sum of contracts from the previous 12 months valued less than $150,000

 

HVAC, Electrical, and Plumbing Contractors

• HVAC contractors - $3,000
• Electrical - $1,000
• Plumbing - $3,000

There are no variable bond amounts for these contractor license classifications.

 

Elevator, Escalator, and Moving Walkway Contractors

This classification has a bond amount of $10,000.

 

How Much Does a New Jersey Contractor Bond Cost?

At a high level, the price to purchase a contractor bond is based on a rate quoted by a surety.

A surety is an insurance company that underwrites contractor bonds. Each surety will perform their own assessment and determine a rate typically using these factors:

• The personal credit of the owner or owners
• Contracting experience and industry experience
• Any prior bond claims if you've been licensed in the past

Based on these factors they will quote a rate for each applicant.

This rate multiplied by your bond amount is the price you pay.

This is where working with a specialized surety agency like Surety Bonds Direct can save you a lot of money.

Specialized surety agencies help customers save money by finding the lowest possible rate and price for contractor bonds.

 

Contractor Bond Pricing for HVAC, Electrical, Plumbing, and Elevator Contractor Bonds

If you're looking for one of these bonds, you do not have to worry about having your credit checked or any background checks.

We have already secured low fixed prices so you can immediately purchase your bond. Here are the prices for each bond.

 

Home Improvement and Home Elevation Contractor Bond Pricing

The home improvement contractor license bond is a credit driven bond. This means you will have to have a soft credit check to determine your rate and your price.

Let's look at example pricing using the $25,000 bond amount so you can get an idea of what your pricing can be.

Pay attention to how one to two percentage points drastically changes the price of the bond.

 

Get Your Exact Pricing Today

While these example prices help you get an idea of what you'll pay, you can get your exact price by requesting a quote today.

Click here and start the online quote process. It takes 90 seconds to submit your request and we'll start pricing shopping for you.

If you prefer to speak with a bond specialist, you can call 1-800-608-9950.

Having a bond specialist secure pricing for you costs nothing and there's zero obligation to purchase the bond once you receive the pricing.

 

County, City, or Performance Based Bond Quotes

The process for getting pricing for county, city, or performance based bonds is the same as each bond requires a personalized quote to determine the price.

Once you agree to your price, purchasing your bond is as easy completing an online order form.

 

What Happens After You Purchase Your Bond?

After you purchase your bond, Surety Bonds Direct's issuing team will prepare your bond with the correct signatures, seals, and the required power of attorney.

 

Home Improvement and Home Elevation Contractors

This surety bond is such a new requirement, we have been mailing it to our customers.

As the requirements become more clear, we expect to be able to email this bond to you.

When you get your bond, if we mail it, expect an additional 3 to 6 days for US mail to reach you. You always have the option to pay for expedited shipping. Ask your bond specialist for the options.

 

HVAC, Electrical, Plumbing, and Elevator Contractors

All of these bonds can be emailed to you. Once you complete your purchase it will take about one business day to have your bond ready.

 

Renewing Your Contractor License Bond

 

Home Improvement and Home Elevation Contractors

New Jersey home improvement and home elevation contractor license bonds expire one year from the active (effective) date of your bond.

The effective date is determined by you when you purchase the bond.

Once you pay the renewal premium, your bond remains active.

HVAC, Electrical, and Plumbing Contractors

• The HVAC bond expires on June 30th of even numbered years
• The electrical bond expires every 3 years from the effective date
• The plumbing bond expires June 30th of every year
• Elevator, escalator and moving walkway bond expire September 30th of even numbered years

As your expiration date approaches, your bond specialist will reach out to you 30 to 45 days in advance of your renewal date to make paying the renewal premium easy.

 

The New Jersey Contractor License Bond is Continuous

A continuous bond means the original bond remains active as long as you pay the renewal premium.

Most of the time, you never have to worry about having a new bond issued or submitting the bond to the Division of Consumer Affairs.

If we find you lower pricing, we'll get you that bond, file it for you, and of course notify you of the bond change.

 

Contractor Bonds And Getting Your New Jersey Business License/Registration

Read our post on getting your New Jersey contractors license if this is your first time getting licensed. The process typically includes.

At a high level the steps are:

1. Meeting examination requirements
2. Paying all applicable fees
3. Decide on license classification and specialty
4. Complete necessary background check forms
5. Purchase your bond
6. Submit your completed application