A bond looks like an insurance policy and is bought like one, but it works differently. It protects someone else from you — and if the surety pays, it expects to be paid back.
Many bonds can be purchased online in minutes. All bonds are subject to surety underwriting and approval.
For many license, permit, and compliance bonds — including the New Jersey home improvement contractor compliance bond — you can apply and buy online through our bond portal, any time of day.
Choose the state and search for your bond by name or type.
Answer the application questions. Many bonds are approved in minutes.
Once approved, pay online and receive your bond to file with the obligee. Some bonds are referred to an underwriter for review.
Call us at 856-283-4341 or request a quote if you need a bid, performance, or payment bond; a court or fiduciary bond; a larger bond amount; or if you are not sure which bond you need or are concerned about your credit. We will find the right surety and walk you through it.
The bond portal opens in a new tab. Online purchase on this site is offered for bonds required in New Jersey and Pennsylvania. All bonds are subject to surety underwriting and approval.
Every surety bond involves the same three roles.
You — the contractor, business, licensee, or fiduciary who is promising to do something.
The party the promise protects: a state licensing agency, a project owner, a court, or a client.
The company that guarantees the promise. If you fail to perform and a valid claim is paid, the surety looks to you for reimbursement.
Before issuing most bonds, the surety will ask the business — and often its owners personally, and sometimes their spouses — to sign a general indemnity agreement. It is the surety’s right to be repaid for any claim it pays, plus its costs.
That is the core difference from insurance. Insurance transfers your risk to the carrier. A bond does not; it lends you the surety’s credit so the obligee will trust you. Read the indemnity agreement before you sign it, and understand who is signing.
| Type | What it guarantees | Typical buyers |
|---|---|---|
| License & permit | That a licensed business will follow the laws and regulations that govern its license | Contractors, auto dealers, mortgage professionals, and other licensees |
| Bid | That a contractor who wins a bid will sign the contract and provide the required bonds | Contractors bidding public and some private work |
| Performance | That the contractor will complete the work according to the contract | Contractors on public projects and larger private jobs |
| Payment | That subcontractors and suppliers will be paid | Contractors on public projects, often paired with performance bonds |
| Court & fiduciary | That a person managing someone else’s money or property will do so faithfully | Estate administrators, guardians, trustees, appeal bonds |
| Fidelity | Protection against theft or dishonesty by employees | Businesses handling client funds or property; janitorial and home-service companies |
New Jersey has moved home improvement contractors from a registration system to a licensing system, and the licensing requirements include both a surety bond and general liability insurance at specified minimums, with the bond amount tied to the size of the contractor’s work. If you do residential improvement work in New Jersey, your bond and your liability policy now go hand in hand with keeping your license.
Requirements in this area have been changing. Confirm the current bond amount and insurance minimums for your situation with the New Jersey Division of Consumer Affairs, and talk to us about meeting both at once.
The premium is typically a percentage of the bond amount, and it depends on the type of bond and the principal’s credit, financial strength, and experience. Many small license bonds cost a modest flat amount. Larger contract bonds are underwritten more like a loan.
For most commercial bonds, yes. The surety is extending its credit on your behalf, so it reviews yours. Programs exist for contractors with weaker credit, usually at a higher rate.
For contractors, the largest single job and the total amount of bonded work a surety will support at one time. It grows with your financial statements, work history, and track record on bonded jobs.
No. A business that advertises “licensed, bonded, and insured” is describing three separate things. A license bond protects the public and the state; it does not replace your liability insurance.
Tell us what the bond is for and who is requiring it. We will identify the right bond and the information the surety will need.
Cadabra Asset Protection LLC is a licensed independent insurance agency serving New Jersey and Pennsylvania. Michael Lindner Jr., licensed insurance producer.
Surety bonds are not insurance for the principal. The principal remains responsible for claims paid under the bond, as set out in the indemnity agreement. Bond issuance is subject to surety underwriting and approval.
Coverage descriptions on this page are general summaries provided for informational purposes only. Coverage, limits, endorsements, and exclusions vary by carrier and by state, and actual coverage is governed solely by the terms of the issued policy. This page is not an offer of insurance and is not a guarantee that coverage will be issued. All coverage is subject to eligibility and carrier underwriting approval.
Nothing on this page is legal advice, and no attorney-client relationship is created by its use or by contacting this agency for insurance services.
