The NJ Division of Consumer Affairs is reminding all Home Improvement Contractors (HIC) that the new the Home Improvement and Home Elevation Contractor Licensing Act, P.L. 2023, c. 237, which NJBA helped usher into law, requires Home Improvement Contractor Businesses and Home Elevation Contractor Businesses (“HICBs/HECBs”) to maintain workers’ compensation insurance, unless exempt under law, and to obtain to a compliance bond, letter of credit, or other security (“additional security”), discussed below. HICBs/HECBs must also still maintain commercial general liability insurance as well, as was already required.
Effective immediately, in order to obtain, renew or reinstate a registration, all HICBs and HECBs must have: 1) workers’ compensation insurance, unless exempt; 2) an additional security; and 3) commercial general liability insurance in a minimum amount of $500,000 per occurrence for HICBs and $1,000,000 per occurrence for HECBs, as previously required by law.
To determine if you may be exempt you can view guidance here.
With respect to the new additional security requirement, pursuant to N.J.S.A. 56:8-142, all HICBs and HECBs must maintain additional security in the form of a compliance bond, irrevocable letter of credit, or securities, money or other security. The principal sum of the additional security must be a minimum of:
- $50,000 for the performance of services pursuant to a contract valued at more than $120,000 or for the performance of services, in the previous 12 months, for contracts valued at a minimum of $750,000;
- $25,000 for the performance of services pursuant to a contract valued between $10,000 and $120,000 or for the performance of services, in the previous 12 months, for contracts valued between $150,000 and $750,000; and
- $10,000 for the performance of services pursuant to a contract valued at less than $10,000 or for the performance of services, in the previous 12 months, for contracts valued less than $150,000.
Existing registrations will expire on March 31, 2025; renewal applications will be available in January 2025. The registration renewal portal can be found here.
(New Jersey Builders Association's Weekender, Nov. 15) |
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