A surety bond in New Jersey is typically required for contractors who are bidding on projects. If you are a contractor that has been asked to provide evidence of a surety bond, you may have questions about what a surety bond is and why you need one.
Here are answers to some of the most frequently asked questions about a surety bond in New Jersey:
What is a Surety Bond?
Because you are required to have a surety bond, it is helpful to understand exactly what it is. A surety bond is basically an insurance policy amongst the contractor, the client, and the insurance company that guarantees your promise to fulfill the terms of the contract. A surety bond allows you to bid on projects without having to pay cash as a deposit.
Who Needs a Surety Bond?
Whether you are bidding on public or private construction projects, you will likely need a surety bond. Typically any project that is worth more than $150,000 requires a surety bond.
Who Supplies Surety Bonds?
Insurance companies offer many types of surety bonds for contractors. Some examples of surety bonds include bid bonds, performance bonds, payment bonds, labor and materials bonds, and maintenance bonds.
To find out which types of surety bonds are right for your situation, contact an insurance agent. An experienced insurance agency will have the knowledge and expertise for your unique bonding needs.