Home Improvement Contractor Compliance Bond in New Jersey

What this bond requires in New Jersey

New Jersey requires registration (not licensure) of Home Improvement Contractor Businesses under the Contractors Registration Act, N.J.S.A. 56:8-136 et seq. Prior to the 2022 amendments, only a $500,000 per-occurrence commercial general liability policy was required. P.L.2022, c.95 added an additional-security requirement at N.J.S.A. 56:8-142, which a contractor can satisfy by posting a compliance surety bond, irrevocable letter of credit, or other approved security in tiered amounts ($10,000 / $25,000 / $50,000) based on contract size. Local municipalities may impose separate licensing or bonding requirements.

Who requires it

The home improvement contractor compliance bond is required by the New Jersey Division of Consumer Affairs, Regulated Business Section under N.J.S.A. 56:8-136 et seq. (Contractors Registration Act); N.J.S.A. 56:8-142 (additional-security requirement, as amended by P.L.2022, c.95).

How to file in New Jersey

Register or renew as a Home Improvement Contractor Business with the New Jersey Division of Consumer Affairs, Regulated Business Section. Submit the HIC application with the initial fee, proof of $500,000 commercial general liability insurance, proof of workers compensation coverage (or exemption), and the required additional security (surety bond, letter of credit, certified bank check, or other approved security) at the tier matching the business contract values.

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FAQ

Common questions

Is a home improvement contractor compliance bond required in New Jersey?

Yes. New Jersey requires home improvement contractor compliance bonds issued by an admitted surety. The required amount is $10,000 to $50,000.

How much is the bond in New Jersey?

The bond amount is $10,000 to $50,000. Your annual premium is a small percentage of that, based on credit and experience.

Who requires the bond?

The bond is required by the New Jersey Division of Consumer Affairs, Regulated Business Section.

How is the bond filed?

Register or renew as a Home Improvement Contractor Business with the New Jersey Division of Consumer Affairs, Regulated Business Section. Submit the HIC application with the initial fee, proof of $500,000 commercial general liability insurance, proof of workers compensation coverage (or exemption), and the required additional security (surety bond, letter of credit, certified bank check, or other approved security) at the tier matching the business contract values.

What does the bond cover?

Surety bonds protect the obligee, not the principal. If you fail to meet the obligation the bond guarantees, the surety pays the claim and recovers from you.

Is a surety bond the same as insurance?

No. Insurance protects you. A surety bond protects whoever required the bond. You repay the surety for any claim they pay.