Overview of New Jersey Contractor License Bond Requirements

During the application process for an NJ contractor license, you will likely need to post a contractor license bond.

On a state level, applicants for an electrical contractor license need to post a $1,000 bond, and applicants for plumbing and HVACR licenses need to post a $3,000 bond.

In addition to that, the cities of Jersey, Ventnor, and Burlington also require certain contractors to post a bond. In Jersey city, contractors need to post a $15,000 bond, whereas in Ventnor, a $4,000 bond is required, and in Burlington a $5,000 bond.

What is the purpose of this bond?

The purpose of the licensing bond for contractors is to guarantee their performance and compliance with legal obligations. In issuing the bond, the surety vouches for the contractor and their reliability.

The bond also functions as protection in the case that a contractor violates their obligations under state law or under a contract. Anyone harmed by such a violation can file a claim against the bond to secure compensation. Money extended under a claim can be as much as the full amount of the bond.

For more information about the purpose of surety bonds and how they work, see our detailed ‘What is a surety bond' guide!

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Learn more about the cost of the different contractor license bonds in New Jersey, and how to get bonded in the following sections!

How Much Does the New Jersey Contractor License Bond Cost?

Your surety bond premium is equal to a percentage of the total amount of your bond. Sureties determine this percentage, or rate, when they review your application, based on the financial information you provide. Several important factors determine the rate that you will be offered.

Factors that determine your bond premium

Your personal credit score is the factor that has the strongest effect on your premium. The higher your credit score, the more reliable the surety will consider you and offer you the bond at a cheaper price. If your score is lower - your rate will go up.

Applicants with high scores are usually offered a rate between 1% and 3% of their bond's amount.

To get a better picture, sureties may also review your:

  • Financial statements
  • Fixed and liquid assets
  • Industry record

See the table below to get a sense of the different ranges of bond premiums available, based on credit score!

New Jersey Contractor License Bond Cost Based on Credit Score
Bond type Bond Amount Credit Score
Above 700 650-699 600-649 Below 599
New Jersey
Electrical contractor bond $1,000 $100 $100 $100 $100
Plumbing and HVACR contractor bond $3,000 $100 $100 $100-$120 $100-$150
City of Jersey
License bond $15,000 $150-$300 $225-$450 $300-$600 $450-$750
City of Ventnor
License bond $4,000 $100 $100-$120 $100-$160 $120-$200
City of Burlington
Street opening bond $5,000 $100 $100-$150 $100-$200 $150-$250

* The table provides a bond cost ballpark estimate based on the applicant's credit score. Actual bond prices can differ due to a number of factors. For an exact quote, please complete our online application. It's fast and 100% free!.

Can I get bonded with bad credit?

You can still get bonded, even if you have bad credit. You will likely be offered a higher rate than applicants with better scores, because sureties want additional security under such circumstances. Yet, you can significantly lower your bond rate by improving your credit score.

Find out more about getting bonded with a lower score from our Bad Credit Program page!

What Happens When a Claim Is Filed Against My Bond?

Surety bonds are legally binding agreements. A claim can be filed against a bond when the contractor has violated its conditions. These conditions include complying with state laws, such as the New Jersey Administrative Code, and any other regulations or rules that apply to a contractor.

When a claim is filed, the surety that has issued the bond will investigate the matter to determine the validity and extent of the claim. If the claim is legitimate, the surety will extend compensation to the claimants.

In return, the bonded contractor will need to repay the surety in full. Under a bond agreement, sureties only vouch for the party they are bonding but do not assume liability for any claims. Since bond claims can be costly and difficult to handle, it is best to avoid situations that may give rise to one.

Apply For Your Contractor License Bond!

To apply for your bond, simply complete the bond application form. We will then contact you with a free quote on your bond and additional details about how to complete the bonding process.

Not ready to apply? Then simply get a free no-obligations quote, so you can see our low prices!

If you have any questions about getting an NJ contractor license bond, get in touch with us at 866.450.3412!

Further Reading

About us:
Bryant Surety Bonds, Inc. is a surety bond agency based in Pennsylvania. Licensed in all 50 states and with access to over 20 T-listed, A-Rated bonding companies, we have the contacts, expertise, and top service to provide you with a hassle-free experience, all while offering competitive rates for your surety bond.