New Jersey Contractors: Important Updates to Insurance and Bond Requirements 2025

New Jersey Contractors: Important Updates to Insurance and Bond Requirements

Effective immediately, significant changes have been made to the insurance and bonding requirements for Home Improvement Contractor Businesses (HICBs) and Home Elevation Contractor Businesses (HECBs) in New Jersey. These changes are the result of the enactment of P.L. 2023, c. 237, which amends the Contractors’ Business Registration Act (CBRA) and establishes the New Jersey State Board of Home Improvement and Home Elevation Contractors.

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Key Changes

  1. Workers’ Compensation Insurance: HICBs/HECBs are now required to maintain workers’ compensation insurance, unless exempt under the law (N.J.S.A 34:15-1 et seq.). To determine if you qualify for an exemption, please refer to the New Jersey Department of Labor and Workforce Development guide: https://www.nj.gov/labor/workerscompensation/assets/PDFs/Forms/WC-373.pdf.
  2. Additional Security: In addition to workers’ compensation and commercial general liability insurance, HICBs/HECBs must now obtain additional security in the form of a compliance bond, irrevocable letter of credit, or other approved financial instruments. The required amount of security varies based on the value of the contracts performed:
    • $50,000: For contracts valued at more than $120,000 or for businesses that performed contracts valued at a minimum of $750,000 in the previous 12 months.
    • $25,000: For contracts valued between $10,000 and $120,000 or for businesses that performed contracts valued between $150,000 and $750,000 in the previous 12 months.
    • $10,000: For contracts valued at less than $10,000 or for businesses that performed contracts valued at less than $150,000 in the previous 12 months.
  3. Commercial General Liability Insurance: The minimum commercial general liability insurance requirements remain in effect: $500,000 per occurrence for HICBs and $1,000,000 per occurrence for HECBs.

Important Information

If you are a home improvement contractor operating in New Jersey, it’s crucial to be aware of a new requirement from the state: Home Improvement Bonds. To legally continue conducting your business, you must secure and maintain the appropriate bond by the deadline of March 31, 2025.

This new requirement is designed to offer greater protection and peace of mind to homeowners like you when working with contractors. Ensuring contractors are bonded adds a layer of financial security, helping to safeguard your investment in your home improvement projects.

What you need to know about these bonds

  • Mandatory Compliance: All home improvement contractors operating in New Jersey must obtain the required bond to continue operating legally.
  • Deadline: The deadline to comply with this new requirement is March 31, 2025.
  • Full Payment Required: Bonds must be paid in full at the time of purchase.
  • Potential Savings: Purchasing a bond for multiple years upfront can result in cost savings.
  • Bond Options and Pricing: The required bond amount is determined by your business’s gross receipts:
    • $10,000 Bond: For gross receipts of $150,000 or less
      • 1 year: $100.00
      • 2 years: $175.00
      • 3 years: $250.00
    • $25,000 Bond: For gross receipts between $150,000 and $750,000
      • 1 year: $250.00
      • 2 years: $437.50
      • 3 years: $625.00
    • $50,000 Bond: For gross receipts over $750,000
      • 1 year: $500.00
      • 2 years: $875.00
      • 3 years: $1,250.00

Please click the link below to complete your bond application:
Bond Application

Renewal Information

Existing registrations will expire on March 31, 2025. Renewal applications will be available in January 2025 through the online portal: https://newjersey.mylicense.com/eGov/Login.aspx?ReturnUrl=%2feGov%2fLogin.

During the renewal process, you will be required to provide proof of compliance with all insurance and bonding requirements.

Take Action Now

To avoid delays or potential denial of your registration renewal, we strongly advise you to take immediate steps to obtain any necessary coverage or security that you do not currently have in place.

Contact Us

If you have any questions or would like assistance with obtaining the necessary insurance or bonds, please complete the form below and a representative will be in touch with you shortly.

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