Do I Need a New Jersey Roofing License?
As of March 2019, New Jersey no longer requires roofers to be licensed. The state�s Department of Community Affairs has reclassified roofing jobs (including total replacement) done on one- or two-family homes as �ordinary maintenance and minor work.� That change means that roofing contractors no longer need to purchase a permit through a municipality.
However, even if you don�t need to obtain a license, it�s still a good idea to purchase a surety bond.
Why Should I Get a Surety Bond?
Many roofers decide to obtain a surety bond even though it isn�t required by law. There are certain types of surety bonds that protect your business and your clients:
- An employee dishonesty bond will protect your business against financial loss due to theft, fraud, or embezzlement by your employees.
- A business service bond protects your clients from theft by your employees, which is always a risk when you have employees working on a client’s property.
Employee dishonesty bonds and business services bonds are often referred to as fidelity bonds.
Purchasing a business services bond is a good marketing strategy. Potential clients will be impressed that you have voluntarily chosen to get your roofing business bonded for their protection.
How Does It Work?
Let�s say that you purchase a business services surety bond and then learn that one of your employees stole some expensive power tools from a client�s garage. The terms of the surety bond agreement, a legally binding contract, specify what conditions must be met in order for a claim to be filed. In some cases, a claim can be filed after an arrest, but in others, the employee must first be convicted of the theft.
When a claim is filed, the surety company that issued the bond will first investigate to make sure that it is valid. If it is, the surety company will try to work out a settlement with the claimant. If that�s not successful, you will be responsible for paying the claim.
That being said, it�s common for surety bond companies to pay a claim and then collect reimbursement from the bonded individual. That gives you some time to come up with the funds to cover the claim. So while you might not need to pay the claim immediately, you are legally obligated to repay the surety company for paying it on your behalf.
How the Roofing License and Surety Bonds Process Works in New Jersey
The annual bond premium for any surety bond is a small percentage of the full �penal� amount of the bond (the maximum amount that will be paid on a claim). Since purchasing a business services bond is entirely voluntary, you get to decide what that amount will be.
The premium rate you�ll pay to purchase a surety bond will be determined by the surety bond company based largely on your personal credit score. If you have excellent credit, your premium rate could be as low as 1% to 3%. If you have some credit issues, you�ll pay a higher premium rate.
Get Bonded Today
If you agree that voluntarily purchasing a surety bond for your New Jersey roofing business is a good idea, give us a call or request a quote online.