New Jersey Surety Bonds

If you want to start a business or engage in an activity that requires licensing in NJ, you’ll likely need surety bonds. Whether it’s construction, HVAC contracting, or many other activities, the State of New Jersey demands proof of capability and financial responsibility before granting licenses for certain professions and trades.

With some of the more stringent surety and licensing requirements in the US, the most common bonds required to conduct business include those for contractors, auto dealerships, notaries, immigrant consultants, freight brokers, and cannabis operators. Mortgage brokers, insurance brokers, and talent agencies also need to equip themselves with a New Jersey surety bond ensuring compliance with municipal and state regulations before they can work on behalf of their clients. 

When required, New Jersey bonds are tied to a performance obligation. The obligation can take various forms whether that be the completion of a construction contract, advance payment to a contractor, or payment guarantees to subcontractors. For construction projects, New Jersey contractor bonds are often required by law to protect the interests of the public, consumers, and the company itself. Surety bonds provide assurance the project will be completed on time, of agreed specification and under the conditions laid out in the contract. 

Bonds in New Jersey are often required to ensure professional license obligations as required in each respective new jersey division. There are numerous non-construction or payment related performance obligations that revolve around licensing, permitting, and probate. 

At Simpli Surety, we are your hassle-free, cost-friendly direct New Jersey surety bond provider. No drawn-out quote process, our instant issue platform has New Jersey surety bonds delivered to your inbox in minutes!

What is a surety bond? How does a surety bond work?

It’s a type of contract that safeguards another party from financial loss. In the case of surety bonds, there are three parties:

• Principal (the person or business which needs to secure their liability)
• Surety (a third party, often an insurance company, who agrees to assume responsibility for the debt and acts as guarantor)
• Obligee (the person or business for whom the surety bond is being issued)

Both parties to a New Jersey surety bond contract agree to the terms and conditions of a legal document that binds them both to fulfill their obligations. These are generally included in an agreement that ensures conformity with state laws. The following information is covered:

1) Principal’s ability to perform a service and or repay a debt if necessary
2) Surety’s obligation should they become financially liable because the Principal fails to meet their obligations under the contract

The important thing about surety bonds is that all Principals and the approved Surety insurance company in New Jersey act as guarantors; however, the Surety company will be responsible for payment due to defaults on contractual agreements under the bond. The bond allows the surety company to seek repayment from the Principal if a claim is valid.

What is a surety bond used for?

Whats a surety bond you ask? Well, it guarantees an agreement between three parties by securing the obligation in that it is used to:

– To secure performance on contracts;
– Guarantee compliance with contract specifications and standards;
– A warranty against defective products;
– Secure licensed professionals such as mortgage lenders

When do you need a surety bond?

Surety bonds are a type of financial guarantee provided by an insurance firm. They’re required for a range of economic transactions, including government purchases and export. Since 1749, bonds have been used in the United States to assure that a party will fulfill its obligations under a contract or agreement.

New Jersey bonds work as an integral part of any business’s success in New Jersey – just ask anyone who has ever missed a deadline! Typically a transaction, contract, or professional licensing requirement will indicate if a performance bond, payment bond, contract bond, license and permit bonds, or another type of bond is needed.

What are the most popular surety bonds in NJ?

New Jersey has many industries that require contract surety bonds, license bonds, or permit bonds. The most common type of surety bond New Jersey is commercial surety bonds. Commercial business contracts require these kinds of surety bonds to ensure that the client receives their end of a product or service as expected. In addition, some professionals such as realtors need this kind of bond before they can practice within New Jersey. Professionals who work with children regularly may also be required to get licensed from the state board and post a license fee. This is where a school district employee license & permit bond comes into play – it helps protect the public against faulty goods/services while guaranteeing quality and safety.

Others include new jersey court bonds, new jersey license bonds, health club bonds, mobile home dealers, and motor vehicles bonds required by the NJ motor vehicle commission. Electrical contractors require electricians to procure an electrical contractor bond and performance bonds which can be a more comprehensive bonding process. Check with the New Jersey department specific to your industry about performance, license or permit bonds required to run your business.

New Jersey Construction Bond Requirements

What are contract bonds?

A large category of New Jersey bond is called contractor bonds, or bonds specific to the construction industry. Contractor surety bonds more commonly are performance bonds, bid bonds, and payment bonds. Construction bonds account for approximately 70% of all bonds written in the USA.

Most of New Jersey’s contractors and building bond requirements must be issued at the municipality level, not at the state level. These exceptions include permits and license liens required by HVAC and electrical contractors for licenses. Local governments often need contractors to obtain a surety bond for public construction projects within the jurisdiction. This includes bid bonds, performance and payments bonds and supply bonds. This Bond provides financial security for the owner and the taxpayers through the assurance that the contractor’s obligations are met and complied with all regulations and the contract is valid.

If you are looking for surety bond cost, the good news is that it’s not as expensive as most people think. Across the industry, Surety bond costs can range depending on the type and terms of the bond. The fee is calculated, also called the surety bond premium, as a percent of the total coverage needed or bond amount, usually ranging anywhere from 1% to 3%. For instance, straightforward license and permit bonds tend to fall on the lower end of the spectrum even below 1%. While a more complex performance bond for a large construction project that carries a higher risk and bond amount, therefore, the surety bond cost can range higher between 1.5% to 2.5% on average. 

Surety bond costs could be higher or lower depending on your surety company, the type of work you are doing, and other factors. If you need help determining how much a surety bond will cost for your specific situation, use our search to find the instant issue bonds you need, and often the surety bond cost and bond amount are listed on the application.

At Simpli Surety, we have 1000’s of instant issue surety bonds available to our clients on-demand at a low surety bond rate. The application and approval process is completed quickly, so you can get back to your business. 

On the rare occasion, your bond application requires additional underwriting, our surety bond agents with over 40 years of experience will step in to help.

New Jersey is known as the garden state for more reasons than its gorgeous greenery and delicious blueberries. In addition to being a top agricultural producer, it is also a top producer of new businesses and business owners. These small- to medium-sized companies need the assistance of surety bonds as they start doing work for clients, sign contracts, or launch their businesses. New Jersey is ranked 5th in the US for fastest-growing cities. This means that its businesses are becoming larger, more profitable and therefore bonding needs are on the rise. 

Many very large corporations are based in New Jersey. Healthcare and pharmaceuticals are big businesses in NJ. NJ is ranked 8th in the nation for biotech. New Jersey’s diverse economy includes manufacturing, technology, transportation, retail, financial services, and healthcare. New Jersey has a highly developed media market with some of the country’s larger cities, including one of the largest on the East Coast in Jersey City, NJ. 

Some healthcare bond requirements include the Health Care Service Firm Bond which is required by the Attorney General of the State of NJ from health care service firms, such as elderly care facilities, whose employees provide companion services, personal care or healthcare. 

As a populous state, contracting is big business. Required by residential and commercial contractors both big and small, general and across specialty trades. New Jersey’s bonding requirement, mandated by New Jersey Contracting License Law N.J.S.A. 45:16A-1, ensures protection of the public and consumers via performance bonds for public projects and various trade bonds such as the New Jersey HVACR Contractor Bond, New Jersey Electrical Contractor Bond, and the New Jersey Fire Alarm, Burglar Alarm & Locksmith Bond.

The best surety company in New Jersey is us! SimpiSurety has all of these bonds and more New Jersey surety bonds available instantly. Search for your bond and apply online in minutes.

Although, whomever you choose, be sure they are a licensed New Jersey surety bond agency that can help you get bonded for the right required bond amount. All surety companies are not the same, so choose wisely when choosing your New Jersey bonding agent.

How much does a surety bond cost in New Jersey?

If you are looking for surety bond cost, the good news is that it’s not as expensive as most people think. Across the industry, A surety bonds cost can range depending on the type and terms of the bond. The fee is calculated, also called the surety bond premium, as a percent of the total coverage needed or bond amount, usually ranging anywhere from 1% to 3%. For instance, straightforward license and permit bonds tend to fall on the lower end of the spectrum even below 1%. While a more complex performance bond for a large construction project that carries a higher risk and bond amount, therefore, the surety bond cost can range higher between 1.5% to 2.5% on average. 

Surety bond costs could be higher or lower depending on your surety company, the type of work you are doing, and other factors. If you need help determining how much a new jersey surety bond will cost for your specific situation, use our search to find the instant issue bonds you need, and often the surety bond cost and bond amount are listed on the application.

At Simpli Surety, we have 1000’s of instant issue surety bonds available to our clients on-demand at a low surety bond rate. The application and approval process is completed quickly, so you can get back to your business. 

Can I get a surety bond online?

Yes. At Simpli Surety, we have 1000’s of instant issue surety bonds available to our clients on-demand at competitive rates. Our surety bonding experts are here to help.

• New Jersey Used Motor Vehicle Dealer Bonds – New Jerseyans are not strangers to traffic. Used car, motorcycle and ATV dealers must secure an auto dealer bond as a part of the licensing process to ensure they are capable of and can maintain ethical business standards. Coverage $10,000. Buy Now
• New Jersey Beverage Tax Bond – The alcoholic beverage tax bonds in New Jersey ensure that investors are repaid if the company does not fulfill its obligations as specified by Title 54, Taxation, of the New Jersey Revised Statutes. These bonds guarantee that the principal pays all taxes, penalties, and interest owing to the state, as well as files reports and pays all taxes relating to sales. Coverage $1,000 to $1,000,000. Buy Now
• Collection Agency Bond – New Jersey collection agency bonds guarantee that the collection agencies (principals) deliver all of the money they collect to its rightful owners and do not take a bigger cut than is permitted in their contract. It guarantees duties are ethically and lawfully while performed. Coverage $5,000. Buy Now
• Energy Consultant Bond – NJ energy consultants are required to be bonded with the State Treasurer’s office according to NJ Rev Stat 48:3-78, which requires them to handle all client information responsibly and lawfully including providing consumer independent advice related to purchase of retail electric and gas services and supply. Along with adherence to confidentiality laws, industry regulations and ensures they won’t file for bankruptcy. Coverage $10,000. Buy Now
• Health Care Service Firm Bond – In New Jersey, a health care service bond is required by the Department of Consumer Affairs. A health care service bond in New Jersey ensures the provider keeps all promises and avoids bankruptcy. The bond also ensures that healthcare services providers comply with N.J.A.C 13:45B-14’s requirements. Coverage $10,000. Buy Now
• Master HVACR Bond – A surety bond is typically required for licensed heating, ventilation, air conditioning, and refrigeration contractors who wish to work in New Jersey as required by The State Board of Examiners of Heating, Ventilating, Air Conditioning and Refrigeration Contractors of the Division of Consumer Affairs. A bond is required to obtain a license and serves as a guarantee that all Master HVACR contractors will follow all provisions of N.J.S.A. 45:16A-1.. Coverage $3,000. Buy Now
• Public Adjuster Bond– A surety bond is required of all New Jersey public adjusters by the Department of Banking and Insurance in order to obtain a license.Principals are obligated to follow all terms of their agreements and pay all taxes and fees owed to the state. If a principal breaches the bond contract, the surety will cover all losses up to the face amount of the bond. Coverage $10,000. Buy Now

For all New Jersey Surety Bonds and Federal Bonds, use the search atop this page or Click for More Bonds below.

• Freight Broker Bonds – often referred to as BMC-84 bonds, are a Federal as opposed to state mandate made by the Federal Motor Carrier Safety Commission to conduct business as transportation brokers. Coverage to $75,000. Buy Now
• Durable Medical Equipment Provider Bonds – often referred to as DMEPOS bonds are required of suppliers of prosthetics, orthotics, and durable medical equipment. A federal mandate per the Centers for Medicare and Medicaid Services to mitigate Medicate billing fraud. Min bond requirement of $50,000 per National Provider Identifier needing Medicate billing authorization. Buy Now
• Performance Bonds – this bond covers general performance obligations related to a contract but most often ensures the satisfactory completion of performance by a contractor. The bond penalty is tied to contract value and can be mandated at federal, state, or municipal levels. Buy Now
• Bid Bonds – a construction bond that protects the developer or project owner of a construction project during the bidding process. It guarantees them that if the bidder can or will not honor the terms of the bid, the owner will be compensated. Bid bonds are commonly required on projects that also involve performance bids and payment bonds. Buy Now
• Payment Bonds – these surety bonds are often paired with performance bonds ensuring prompt payment to suppliers and subcontractors on the project. This signals to the owner, supplier, and sub that the contractor will be compliant in working with them to completion and paying on time. Buy Now