New Jersey Surety Bonds

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With over 75 years of experience, Surety Bond Professionals is a family owned and operated bonding agency. 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.

Continue reading below to learn more about common New Jersey bonding requirements, or use our online form to request a quote now.

Required Surety Bonds in New Jersey

Typical New Jersey bonds include (click on any for more info):

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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. 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.

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Our experienced professionals will gladly answer any questions you may have about New Jersey surety bonds to help you get the bonds you need. Request a quote today!

Frequently Asked Questions

There are three parties to every surety bond agreement, which is a legally binding contract:

  • The “obligee” is the state or local agency requiring the surety bond.
  • The “principal” is the party required to purchase the bond.
  • The “surety” is the company underwriting and issuing the bond.
  • The obligee sets the required amount of the bond, which is the maximum amount that will be paid out on a claim. The obligee also spells out the conduct required of the principal in order to avoid claims against the surety bond.

Any party who suffers a financial loss because the principal has violated the terms of the bond has the right to file a claim against the bond. The principal is solely responsible for paying all valid claims.

However, the surety will often pay a claim and wait to be reimbursed by the principal. This ensures timely settlement of the claim and gives the principal some time to gather the necessary funds.

What the principal in a bond agreement actually pays for a surety bond is a small percentage of the required bond amount established by the obligee. That percentage, known as the premium rate, is determined by the surety company based on the applicant’s credit score and other indicators of the likelihood of claims being filed against the bond. Those with good credit can expect a rate of 1-3%. Those with poorer credit may pay a higher premium.
No claim against a bond will be paid until the surety company has investigated and determined that it is valid. After making payment to a claimant, the surety company will demand reimbursement from the principal.