New Jersey Home Improvement Contractor and Home Elevation Contractor License Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Home Improvement Contractor and Home Elevation Contractor License bond.
At a Glance:
- Bond Amount: Based on the typical scale of projects the contractor works on.
- $10,000 Bond: For contracts valued at less than $10,000, or for the performance of services in the past 12 months for contracts valued less than $150,000
- $25,000 Bond: For contracts valued between $10,000 and $120,000, or for the performance of services in the past 12 months for contracts valued between $120,000 and $750,000
- $50,000 Bond: For contracts valued at $120,001 or greater, or for the performance of services in the past 12 months for contracts valued at a minimum of $750,000
- Who Needs It: All home improvement and home elevation contractors are required to obtain this bond by the New Jersey State Board of Home Improvement and Home Elevation.
- Purpose: To protect the state and civilians from unlawful practice and fraudulent activities on behalf of the contractor
What is a Home Improvement and Home Elevation Contractor License Bond?
Home Improvement and Home Elevation Contractor License Bonds are compliance bonds required by a law (P.L. 2023, c. 237) signed by New Jersey’s Governor Murphy on January 8th, 2024. The bond is in place to protect the state and civilians from any unlawful or fraudulent actions from Home Improvement and Home Elevation contractors in the state of New Jersey. When a contractor’s license renews, or a new contractor is obtaining a license, they must provide this surety bond to accompany their license to comply with the state law.
Who Needs a Home Improvement and Home Elevation Contractor License Bond?
Anyone who meets the state’s definition of “contractor” as referenced in P.L. 2023, c. 237.
- ‘”Contractor” means an individual providing home improvement or home elevation services, or both types of services, for a corporation, partnership, association, sole proprietorship, and any other form of business organization or entity that enters into contracts for home improvement, home elevation, or both types of services with consumers. This shall not include: (1) an individual who owns or manages a home improvement or home elevation business but does not perform home improvement or home elevations services; or (2) employees of or individuals contracted by a sole proprietorship, corporation, partnership, association, or other form of a business entity hired or contracted to sell home improvement or home elevation services, or both types of services. An individual who makes a home improvement or home elevation without compensation shall not be deemed to be a contractor with respect to that service.’
Who Regulates Home Improvement and Home Elevation Contractor License Bonds?
These bonds are regulated by the New Jersey State Board of Home Improvement and Home Elevation Contractors. The bond amounts will vary based on the contractor’s average project size. The bond amounts and the monetary limits are as follows:
- $10,000 Bond: For contracts valued at less than $10,000, or for the performance of services in the past 12 months for contracts valued less than $150,000
- $25,000 Bond: For contracts valued between $10,000 and $120,000, or for the performance of services in the past 12 months for contracts valued between $120,000 and $750,000
- $50,000 Bond: For contracts valued at $120,001 or greater, or for the performance of services in the past 12 months for contracts valued at a minimum of $750,000
What are the Underwriting Requirements for a Home Improvement and Home Elevation Contractor License Bonds?
Home Improvement and Home Elevation Contractor License bonds are underwritten based on the contractor’s credit history. The surety will pull a soft credit hit to ensure that the contractor qualifies for the best rate.
How Much Does a Home Improvement and Home Elevation Contractor License Bond Cost?
A Home Improvement and Home Elevation Contractor License bond will generally cost between .75% – 2% of the bond amount per year in a standard market. Applicants with the best credit can expect to pay the lowest rates, while applicants with poor credit will pay higher rates. The chart below offers a quick reference for the approximate cost of a $10,000 Home Improvement and Home Elevation Contractor License bond
$10,000 Home Improvement and Home Elevation Contractor License Bond Cost Sample
| Credit Score | Bond Cost |
|---|---|
| 720+ | $75 |
| 680-719 | $90 |
| 650-679 | $100 |
| 600-649 | $200-500 |
| 550-599 | $500+ |
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
What Information is Collected for Home Improvement and Home Elevation Contractor License Bonds?
- Surety company underwriters will collect and review the following information to determine eligibility for a Home Improvement and Home Elevation Contractor License bond:
- Legal name of the applicant
- Business name
- Address, phone number, and email address
- Social security number
- Years in business
What Can Your Customers Do to Avoid Claims Against a Home Improvement and Home Elevation Contractor License Bond?
To avoid claims on a Home Improvement and Home Elevation Contractor License bond, your customers must ensure they honor the laws set forth in the Contractors Registrations Statutes.
How Can an Insurance Agent Obtain a Home Improvement and Home Elevation Contractor License Bond?
BondExchange makes obtaining a Home Improvement and Home Elevation Contractor License Bond easy. Simply login to your account, select the state in which the bond is needed and use our keyword search to find the “Home Improvement” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
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