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.
Key Changes:
- 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.
- 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.
- 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.
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.