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Surety Bonds in New Jersey

Surety Bonds in New Jersey

There are many types of surety bonds in NJ that all serve a different purpose, from ensuring compliance with state regulations to protecting clients from financial losses. Viking Bond Service has been working with businesses in New Jersey to help them find the bond they need for many years. Our experts are here to offer advice and guidance on finding the right bond at an affordable price. Whether you need a commercial bond or a contract bond Viking Bond Service is here to help.

How does a surety bond in New Jersey work?

Surety bonds are a form of financial guarantee. When someone obtains a surety bond in New Jersey or any other state, they agree to accept financial liability for breaches of state law, codes of ethics, contractual agreements, or other mandatory obligations. The other party in the bond agreement may file a claim for damages against the surety bond if the bonded party violates previously agreed-upon terms. It's the bonded party's responsibility to pay the claim, but if they can't or won't, the surety agency that backs the bond guarantees payment to the claimant. The surety bond obligates the bondholder to pay the surety agency back for any settled claims, with interest and feeds added.

What is the purpose of a surety bond in New Jersey?

All types of surety bonds have two primary purposes. The first is to hold someone financially accountable for their mistakes. Surety bonds often factor into professional agreements where one party relies on another to meet specific obligations: for quality, quantity, legality etc. By creating a financial liability, surety bonds compel the bonded party to meet expectations or else pay for the damages that result. The other purpose of New Jersey surety bonds is to ensure that anyone wronged by a bonded party can seek and receive compensation for their troubles. Surety bonds guarantee payment for all valid claims - claims undergo a thorough investigation to prove whether they have merit. Compared to other options like the court system, surety bonds are an efficient and accessible way for people to pursue the compensation they're entitled to. In general, the purpose of surety bonds is to discourage bad behavior by holding the responsible party accountable. Since surety bonds are effective in that regard, they're common throughout the Garden State.

Who are the parties in a New Jersey surety bond?

All surety bond agreements involve three parties:

  • The principal is the party that obtains the bond, renews it when necessary, and pays for claims filed against it.
  • The obligee is the party that requires the surety bond, sets the bond limits, and files claims for damages caused by the principal.
  • The surety is the agency that issues a bond to the principal and, when necessary, pays claims to the obligee. The surety is only an intermediary who the principal must pay back for all claims settled with the obligee.

Who needs a surety bond in New Jersey?

Lots of different people, from motor vehicle dealers to contractors to gym owners. It may be necessary to get a surety bond before being granted a professional license, before finalizing a contract, or before formalizing a professional relationship. In most cases, it's clear when someone needs a surety bond because other important requirements (like getting a license) will require proof of that bond. Anyone who's unsure whether they need a surety bond or unclear what kind of surety bond they need can rely on Viking Bond Service for help. Contact our team for a one-on-one consultation that costs nothing and comes with no requirement to seek a bond.

How to get a surety bond in New Jersey

To get any type of surety bond in NJ you'll need to start the process by submitting an application form and the required supporting documentation to a bonding company licensed to operate in the state. Viking Bond Service offers an easy application process for all bonds. If you're in need of a commercial bond you can submit the application online. For contract bonds, one of our team members will guide you through the slightly more detailed process over the phone. In addition to the application form, you may also need to submit supporting documentation that includes financial information and your business experience. This data, along with a credit check, will be used to provide you with an accurate bond quote.

The cost of surety bonds in New Jersey

There are a number of factors that will affect the cost of your surety bond. Some of the main influences include bond type, bond amount, and your credit history. The information you provided in your surety bond application is used to calculate the risk level of issuing your bond. Many people are often surprised to learn that their credit score is used to calculate their bond premium. Your credit rating is used to assess how likely it is that your bond, which is a form of credit, will cost the surety money. If your credit is good then you are perceived as low risk and will pay a lower premium. If you have poor credit then you will pay a higher premium as you are considered a higher risk. Viking Bond Service can help you find an affordable bond, whatever your current credit score.

Common surety bonds in New Jersey

Surety bonds generally fall into two main categories in New Jersey and the rest of the US, these are commercial bonds and contract bonds. Viking Bond Service can help you with all of the common as well as the less common surety bonds available in the state.

Some commercial bonds are often known as license bonds and permit bonds. These types of bonds are generally required by the state in order to obtain a license to operate specific businesses in New Jersey. Some of the more common commercial bonds include freight broker bonds and wage & welfare bonds.

Contract bonds are most common in the construction industry where they are used as a financial backup for contracts. They help ensure compliance with contractual terms by offering compensation to the wronged party, which has to be repaid by the bonded party, should contract terms not be met. There are four common contract bonds: bid bonds, payment bonds, performance bonds, and maintenance bonds.

New Jersey surety bonds by Viking Bond Service

Viking Bond Service is a leading supplier of surety bonds in NJ. We have many years of experience helping clients in New Jersey get the surety bonds they need when they need them. Call, email, or submit your application online to receive a quote within 24 hours.

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Get a bond quote in as little as 24 hours by completing this online application at any time. You can also get more information through the contact form on this page or by calling 1-888-278-7389.

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