New Jersey Surety Bonds
With over 30 years of experience, Surety Bond Professionals is a family owned and operated bonding company. Our expert agents will gladly assist with all of your New Jersey surety bond needs. Learn more about New Jersey bonding requirements below, or use our convenient online form to request a quote today.
Required Surety Bonds in New Jersey
The categories of surety bonds most commonly required in New Jersey are contractor and construction bonds, license and permit bonds, and court bonds. Though there are others, these types of bonds are the ones that are most commonly needed.
New Jersey Construction Bond Requirements
In New Jersey, most contractor and construction bonds are required at the municipal or county level, not at the state level. Exceptions to this include the license and permit bonds required as part of the licensing of HVAC and electrical contractors.
Local governments typically require contractors to obtain surety bonds in order to bid on, win, or work on public works projects within the jurisdiction. These include bid bonds, performance and payment bonds, and supply bonds. These bonds provide financial protection for project owners and taxpayers by ensuring that contractors abide by the terms of their contracts and comply with all applicable regulations.
Construction surety is our specialty, and our experienced professionals stand ready to help you obtain any bonds you may need.
New Jersey License Bonds
The state of New Jersey and some municipalities regulate certain professions and types of businesses by requiring them to be licensed to operate in the state. Typically, a license surety bond is required as part of the licensing process. Proof of bonding must be submitted along with the license application, and the bond generally must be renewed when the license itself is renewed.
License and permit bonds provide protection for the state or municipality and for consumers. They obligate the bonded individuals to do business honestly and ethically, in accordance with applicable laws and regulations.
Here are a few of the state entities that impose license and permit bond requirements in New Jersey:
- The Division of Motor Vehicles, Dealer Licensing Bureau imposes a bonding requirement on applicants for licensing as dealers of new or used motor vehicles.
- The Board of Examiners of Electrical Contractors requires electricians to purchase a New Jersey Electrical Contractors bond when they apply for licensing.
- The New Jersey Division of Consumer Affairs requires licensing and bonding for a number of occupations and businesses, including employment agencies, alarm and locksmith companies, home health care agencies, and professional fundraisers.
Note that others may be required to obtain a license bond as we. Contact an agent for assistance answering any questions you may have.
New Jersey Court Bonds
There are two main types of court bonds that may be required in New Jersey:
- Appeal bonds provide assurance that court-ordered damages, court costs, and legal fees will be paid by the losing party to the winning party in an appellate case.
- Fiduciary bonds guarantee that individuals appointed by the court to serve in a fiduciary capacity, such as the executor of an estate or guardian of a minor, will act honestly and responsibly in carrying out their duties.
How Much Does A Bond Cost?
The obligee in a bond agreement (the party requiring the bond) sets the required amount. This is the maximum penal amount of the bond that can be paid out to a claimant. The surety (the company underwriting and issuing the bond) establishes a premium rate for each applicant. This is the percentage of the bond amount that the principal (the party purchasing the bond) will pay as the annual bond premium. The premium rate is based largely on the principal’s personal credit score. It can range from 1-3% for those with the best credit to 4-10% for applicants with poor credit.
What Happens When a Claim is Filed?
When a claim is filed against a bond, the surety company will launch an investigation to make sure that it is valid before paying it. Once a claim is paid, the principal is obligated to reimburse the surety company.
Contact us if you have any questions about New Jersey surety bonds, or use our convenient online quote form to get started.