New Jersey HVACR Contractor Bond: A Comprehensive Guide
This guide provides information for insurance agents to help contractors on New Jersey HVACR Contractor bonds
At a Glance:
- Lowest Cost: $50 per year or $5 per month
- Bond Amount: $3,000
- Who Needs It: All individuals and businesses seeking to obtain a heating, ventilating, air conditioning and refrigeration contractor license in the State of New Jersey
- Purpose: To ensure the public will receive compensation for any damages should the contractor fail to comply with contractor licensing law
- Who HVACR Contractors in New Jersey: The New Jersey Board of Examiners of Heating, Ventilating, Air Conditioning and Refrigeration Contractors
New Jersey Revised Statute 45:16A-5 requires HVACR contractors operating in the state to obtain a license with the Board of Examiners of Heating, Ventilating, Air Conditioning and Refrigeration Contractors. The New Jersey legislature enacted the licensing laws and regulations to ensure that HVACR 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 $3,000 HVACR contractor surety bond to be eligible for licensure.
What is the Purpose of the New Jersey HVACR Contractor Bond?
New Jersey requires HVACR contractors to purchase the HVACR Contractor Bond as part of the application process to obtain an HVACR 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 HVACR Contractor Surety Bond?
BondExchange makes obtaining a New Jersey HVACR 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.
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Is a Credit Check Required for the New Jersey HVACR Contractor Bond?
No, a credit check is not required for the New Jersey HVACR Contractor Bond. Because this bond is considered relatively low-risk, the same low rate is offered to all HVACR contractors in New Jersey.
How Much Does the New Jersey HVACR Contractor Bond Cost?
The $3,000 New Jersey HVACR Contractor Bond costs just $50 per year or $5 per month.
How Does New Jersey Define “HVACR Contractor”?
To paraphrase New Jersey Revised Statute 45:16A-2, an HVACR contractor is an individual or business who performs or advertises their capability to perform work related to any heating, ventilating, air conditioning or refrigeration systems as an independent business.
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 HVACR Contractors Apply for a License in New Jersey?
HVACR contractors in New Jersey must navigate several steps to secure their HVACR contractor license. Below are the general guidelines, but contractors should refer to the licensing statutes for details on the process.
License Period – The New Jersey HVACR Contractor license expires on June 30 of every even-numbered year (2022, 2024, etc.) and must be renewed by the expiration date
Step 1 – Meet the Experience Requirements
Applicants for an HVACR contractor license must have the necessary experience as required by the Board of Examiners of Heating, Ventilating, Air Conditioning and Refrigeration Contractors. Contractors must meet the following criteria to obtain a New Jersey HVACR contractor license:
- Is 21 years of age or older
- Meets one of the following experience requirements:
- 4 year apprenticeship followed by one year of journeyperson experience
- 4 year Bachelor’s degree in HVACR followed by one year of journeyperson experience
- 4 year Bachelor’s degree in an HVACR related field followed by three years of journeyperson experience
- 2 year degree and a 2 year apprenticeship followed by 1 year of journeyperson experience
Step 2 – Purchase a Surety Bond
HVACR contractors must purchase and maintain a $3,000 HVACR contractor surety bond
Step 3 – Purchase Insurance
HVACR contractors are required to purchase liability insurance with a minimum limit of $500,000
Step 4 – Complete the Application
The New Jersey HVACR Contractor application can be completed online through the Board of Examiners of Heating, Ventilating, Air Conditioning and Refrigeration Contractors licensing portal. Contractor’s must complete the license application, including the following steps:
4.a Experience Verification – Contractors will need to provide verification of their educational and work experience including transcripts and detailed accounts of all work performed. All work experience must be verified by the contractor’s employer/supervisor.
4.b Fees – Applicants for the HVACR contractor license must pay a $100 fee when submitting their license application. After the contractor has submitted their application, they will need to pay the $160 licensing fee.
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 HVACR Contractor Renew Their License?
HVACR contractors can renew their license online through the Board of Examiners of Heating, Ventilating, Air Conditioning and Refrigeration Contractors licensing portal. Contractors will need to complete 5 hours of continuing education each renewal period (except the first one), and pay a $160 renewal fee. The New Jersey HVACR Contractor license expires on June 30 of every even numbered year (2022, 2024 etc) and must be renewed by the expiration date.
What Are the Insurance Requirements for the New Jersey HVACR Contractor License?
The State of New Jersey requires HVACR contractors to purchase liability insurance with a minimum limit of $500,000. Contractors will need to purchase and maintain a $3,000 HVACR contractor surety bond.
How Do New Jersey HVACR Contractors File Their Bond?
Contractors should mail the completed bond form, including the power of attorney, to the following address:
State Board of Examiners of Heating, Ventilating,
Air Conditioning and Refrigeration (HVACR) Contractors
P.O. Box 47031
Newark, NJ 07101
The HVACR 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
- Date the bond is sealed
- Bond term
- Witness signature
What Can Contractors Do to Avoid Claims Against the New Jersey HVACR Contractor Bond?
To avoid claims on the HVACR 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 HVACR Contractors in New Jersey?
New Jersey requires HVACR 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 HVACR Contractor Customers?
New Jersey conveniently provides a public database to search for active HVACR 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:
- Electrical Contractor: $3,000 bond limit
- Master Plumber: $3,000 bond limit
- Elevator, Escalator, and Moving Walkway Mechanics License: $10,000 bond limit