In January 2024, Governor Murphy signed P.L. 2023, c. 237 into law, introducing changes to home improvement contractor licensing requirements in New Jersey. Among the updates is a new compliance bond requirement, aimed at improving consumer protection and raising accountability standards for contractors.

The legislation, which amended the Contractors’ Business Registration Act (CBRA) and introduced the Home Improvement and Home Elevation Contractor Licensing Act, requires all home improvement and home elevation contractors to provide financial security in the form of:

• A compliance bond
• An irrevocable letter of credit
• Another acceptable securities.

You must meet these requirements to obtain, renew or reinstate a contractor registration.

What Do These Changes Mean for Me? 

If you’re a contractor in New Jersey, here’s what this means for you. Previously, contractors only needed to register with the New Jersey Division of Consumer Affairs (DCA) to operate. Now, you must obtain a license with several new requirements, including:

• Completing an approved training program

• Passing a licensing exam

• Meeting stricter financial security and insurance obligations

These measures are intended to ensure that licensed contractors meet high professional standards, protecting consumers and businesses.

Note: The training program and licensing exam have not been rolled out yet. However, the bond and insurance financial security requirements have been required as of April 2025.

New Home Improvement Contractor Compliance Bond Requirements

New Jersey home improvement contractors need $10,000–$50,000 in compliance surety bond coverage. The compliance bond tiers are determined by the value of your projects over the past 12 months, as outlined below:

• A $10,000 bond is required for single contracts under $10,000 or annual totals below $150,000.
• A $25,000 bond is required for $10,000–$25,000 single contracts or annual totals of $150,000–$750,000.
• A $50,000 bond is required for single contracts valued over $120,000 or annual contract totals exceeding $750,000.

You can get a free bond quote and learn more on our New Jersey Home Improvement Bond Guide page.

Alternatively, you can provide a letter of credit or another form of financial security approved by the Division. Learn more about surety bonds versus letters of credit here. 

New HIC Contractor Insurance Requirements

In addition to the compliance bond, all New Jersey contractors must carry commercial general liability insurance covering at least $500,000 per occurrence for home improvement work or $1,000,000 per occurrence for home improvement services. 

If you don’t already have workers’ compensation insurance, you’ll also need to check if you’re exempt or must get a policy to stay compliant under this new legislation. Review the New Jersey Department of Labor and Workforce Development guide for more information.

Building Trust While Navigating Challenges

The compliance bond isn’t just about meeting state requirements. It’s also a way to build trust with your clients. By securing this bond, you show you’re committed to doing the right thing, whether that’s completing projects as promised or adhering to state regulations. This bill provides clients with an easier means of restitution for faulty work. 

However, for many small or independent contractors, the added financial burden of these bonds — combined with the stricter licensing and insurance requirements — may feel prohibitive. Stricter regulations make it harder for contractors to stay in business, particularly those operating on smaller budgets or serving lower-income clients. 

While these regulations intend to raise contractor standards in New Jersey, they also present a higher barrier to entry and potential issues for many contractors to remain compliant.

How to Stay Compliant With 2026 HIC Licensing Laws

The licensing requirements will officially take effect two years after a majority of the New Jersey State Board of Home Improvement and Home Elevation Contractors members are appointed by the Governor, which was partially formed in July 2025. 

Existing registrations expire on March 30, 2026, and renewal applications open each year in January. Use the list below to stay up-to-date with compliance requirements:

• Review your current registration status to ensure it’s active and in good standing.
• Evaluate your insurance coverage and confirm it meets the new requirements for general liability and workers’ compensation.
• Maintain an active surety bond and verify if you need to increase your bond coverage if your business has grown.
• Stay informed on updates from the DCA and the new Board of Home Improvement and Home Elevation Contractors. 
• Plan for CE and exam requirements, particularly if you lack prior experience that may qualify you for grandfathering exemptions.

To stay up-to-date, you can virtually attend monthly Board meetings or review meeting minutes and agendas on your own time.

New Regulations Signed Into Law in 2026

Under an amendment to N.J. Admin. Code § 13:45C-1.3, the following conduct is deemed as failure to cooperate with contractor license laws and may lead to license revocation:

• Not responding to complaint inquiries promptly
• Not providing timely records about licensee conduct
• Not attending scheduled legal proceedings
• Failing to produce documents for any subpoenas, report under oath, or comply with any other legal proceedings
• Failing to provide timely notice of a change of address

The Board is also outlining and reviewing proposed education requirements, including full curriculum lists.

New NJ HIC Contractor Licensing Steps

If you’re applying for the first time, the experts at SuretyBonds.com created a step-by-step licensing guide on How to Become a Home Improvement Contractor in New Jersey.

You’ll need to register your business, purchase the surety bond and insurance, apply, and pay the $110 fee. All applications must be mailed directly to the Division of Consumer Affairs, Regulated Business Section – Home Improvement Contractor Business Unit.

However, if your license lapsed, you can only submit the license reinstatement application online. 

Updates

August 2025: The newly formed Board of Home Improvement and Home Elevation Contractors met and nominated Mr. Louis Padula as Board President and Mr. Kyle Baptiste as Vice-Chair. There are currently five members, but four more seats are open.

November 2025: The Board began discussing continuing education requirements and outlining potential curriculum topics.

December 2025: The DCA opened a consumer complaint form allowing people to report unlicensed activity or complaints against licensed HICs. Any complaints filed may be grounds for potential investigation and bond claims. 

Latest Update: January 2026 

We’ll continue to update this article as more information comes out.