New Jersey Electrical Contractor Bond: A Comprehensive Guide
This guide provides information for insurance agents to help contractors on New Jersey Electrical Contractor bonds
At a Glance:
- Lowest Cost: $50 for a three-year term or $2 per month
- Bond Amount: $1,000
- Who Needs It: All individuals and businesses seeking to obtain an electrical contractor license in the State of New Jersey
- Purpose: To ensure the public will receive compensation for any damages should the electrician fail to comply with contractor licensing law
- Who Electrical Contractors in New Jersey: The New Jersey Board of Examiners for Electrical Contractors
New Jersey Revised Statute 45:5A-9 requires electrical contractors operating in the state to obtain a license with the Board of Examiners for Electrical Contractors. The New Jersey legislature enacted the licensing laws and regulations to ensure that electrical contractors engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, contractors must purchase and maintain a $1,000 electrical contractor surety bond to be eligible for licensure.
What is the Purpose of the New Jersey Electrical Contractor Bond?
New Jersey requires electrical contractors to purchase the Electrical Contractor Bond as part of the application process to obtain an electrical contractor license. The bond ensures that the public will receive compensation for financial harm if the contractor fails to comply with the licensing regulations. In short, the bond is a type of insurance that protects the public if the contractor breaks licensing laws.
How Can an Insurance Agent Obtain a New Jersey Electrical Contractor Surety Bond?
BondExchange makes obtaining a New Jersey Electrical Contractor Bond easy. Simply login to your account and use our keyword search to find the “contractor” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the New Jersey Electrical Contractor Bond?
No, a credit check is not required for the New Jersey Electrical Contractor Bond. Because this bond is considered relatively low-risk, the same low rate is offered to all electrical contractors in New Jersey.
How Much Does the New Jersey Electrical Contractor Bond Cost?
The $1,000 New Jersey Electrical Contractor Bond costs either $50 for a three-year term or $2 per month.
How Does New Jersey Define “Electrical Contractor”?
New Jersey Revised Statute 45:5A-2 defines an electrical contractor as “a person who engages in the business of contracting to install, erect, repair or alter electrical equipment for the generation, transmission or utilization of electrical energy.”
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How Do Electrical Contractors Apply for a License in New Jersey?
Electrical contractors in New Jersey must navigate several steps to secure their electrical contractor license. Below are the general guidelines, but contractors should refer to the Board of Examiners for Electrical Contractor’s application instructions for details on the process.
License Period – The New Jersey Electrical Contractor License has a triennial expiration date and expires on March 31 of each renewal year. Contractors must renew their licenses by the expiration date each renewal year (2021, 2024, etc.).
Step 1 – Meet the Experience Requirements
Applicants for an electrical contractor license must have the necessary experience as required by the Board of Examiners for Electrical Contractors. Contractors must meet the following criteria to obtain a New Jersey electrical contractor license:
- Is 21 years of age or older
- Has a high school diploma or equivalency
- Meets one of the following experience requirements:
- 5 years of hands-on electrical experience. “Hands-on experience” does not include supervising or performing other managerial tasks
- Has completed an approved four-year apprenticeship program and has one year of hands-on experience
- Meets the requirements necessary to become a qualified electrical journeyman and has completed at least one year of hands-on experience
- Has a bachelor’s degree as well as two years of practical hands-on experience
- Has worked in the electrical contracting field for at least 5 years and submits an employer affidavit certifying their experience
Step 2 – Purchase a Surety Bond
Electrical contractors must purchase and maintain a $1,000 electrical contractor surety bond
Step 3 – Purchase Insurance
Electrical contractors are required to purchase liability insurance with a minimum limit of $300,000
Step 4 – Complete the Application
The New Jersey Electrical Contractor application can be completed online through the Board of Examiners for Electrical Contractor’s licensing portal. Contractors must complete the license application, including the following steps:
4.a Experience Verification – Contractors will need to provide verification of their work experience including detailed accounts of all work performed. All work experience must be verified by the contractor’s employer/supervisor
4.b Fees – Applicants for the electrical contractor license must pay a $100 fee when submitting their license application
Step 5 – Pass the Exam
After the contractor has submitted their application, they will receive instructions on to register for and take the required licensure exam. The exam is administered by PSI, who can be reached here
How Does a New Jersey Electrical Contractor Renew Their License?
Electrical contractors can renew their licenses online through the Board of Examiners for Electrical Contractor’s licensing portal. The New Jersey Electrical Contractor License has a triennial expiration date and expires on March 31 of each renewal year. Contractors must renew their licenses by the expiration date each renewal year (2021, 2024, etc.).
What Are the Insurance Requirements for the New Jersey Electrical Contractor License?
The State of New Jersey requires electrical contractors to purchase liability insurance with a minimum limit of $300,000. Contractors will need to purchase and maintain a $1,000 electrical contractor surety bond.
How Do New Jersey Electrical Contractors File Their Bond?
Contractors should mail the completed bond form, including the power of attorney, to the following address:
New Jersey Office of the Attorney General
Division of Consumer Affairs
Board of Examiners of Electrical Contractors
124 Halsey Street, 6th Floor, P.O. Box 45006
Newark, New Jersey 07101
The electrical contractor surety bond requires signatures from both the surety company that issues the bond and the contractor. The surety company should include the following information on the bond form:
- Legal name and location of the entity/individual(s) buying the bond
- Surety company’s name
- Bond amount
- Date the bond is sealed
- Bond term
- Witness signature
What Can Contractors Do to Avoid Claims Against the New Jersey Electrical Contractor Bond?
To avoid claims on the Electrical Contractor Bond, contractors must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:
- Honor all contractual obligations when completing a project
- Do not engage in any acts of fraud
What Other Insurance Products Can Agents Offer Electrical Contractors in New Jersey?
New Jersey requires electrical contractors to obtain liability insurance. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for New Jersey Electrical Contractor Customers?
New Jersey conveniently provides a public database to search for active electrical contractors in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
What other Contractor License Bonds are Required in New Jersey?
Contractors in New Jersey will need to obtain specific bonds correlating with their license type. Below are all the different contractor licensing bonds required by the State of New Jersey:
- HVACR License: $3,000 bond limit
- Master Plumber: $3,000 bond limit
- Elevator, Escalator, and Moving Walkway Mechanics License: $10,000 bond limit