New Jersey, NJ Bonds 

The Franchino Agency is one of the largest writers of NJ ELECTRICAL CONTRACTOR BUSINESS PERMIT LICENSE BONDS AND NJ MASTER PLUMBER LICENSE BONDS in the State of New Jersey.  We typically write over 1,200 NEW JERSEY ELECTRICAL CONTRACTOR BONDS per renewal cycle (3 years) and over 1,000 NEW JERSEY MASTER PLUMBER BONDS PER CYCLE (2 years)

Learn more or purchase a: NJ Plumbing Contractor License Bond 
(cost is $50. for the two year term)

Learn more or purchase a: NJ Electrical Contractor License Bond 
(cost is $50. for the three year term)

Learn more or purchase a: NJ Fire, Burglar, or Locksmith License Bond (cost is $75. for the three year term)

The Franchino Insurance agency writes many other types of BONDS in New Jersey, including...

• CONTRACTOR BONDS (BID AND PERFORMANCE BONDS)
• WAGE AND WELFARE BONDS a/k/a WAGE AND BENEFIT BONDS
• STREET OR ROAD OPENING BONDS
• PERMIT BONDS
• ESTATE BONDS
• ERISA BONDS
• JERSEY CITY CONTRACTOR BONDS
• JANITORIAL CONTRACTOR BONDS

Types of Bonds

Administrator Bond
Guarantees that an administrator will act in good faith. Example: An administrator / executor will properly administer a decedent's estate in according with the laws and orders of the court.

Appeal Bond
Guarantees payment of a final judgement when an appeal is filed

Auctioneer Bond

Bid and Performance Bond
Guarantees the faithful performance of a contractor. When a contractor bids for a municipal, county, state or public job the bid must be be accompanied by a bid bond (typically for 10% of the amount of the job).  This bond states that if the contract is awarded to the contractor (lowest bidder) then he cannot back out but must perform.  Upon winning of the bid, a performance bond must be submitted guaranteeing that the contractor will perform the job in full.

Burglar Alarm Contractor License Bond
The New Jersey Division of Consumer Affairs, requires all licensed Fire, Burglar and Locksmiths contractors to purchase a $10,000. surety bond.  This bond guarantees that the contractor will follow the rules and regulations of the board.

Cigarette / Cigar / Tobacco Tax Bond
Guarantees that the retailer / wholesaler will pay the appropriate taxes to the State. 

Contractor Bond or Contract Bond

Court Bond

Contract postal unit bonds — Required of small businesses in rural areas which act as a rural post office. Guarantees payment of money, stamps, money orders will be paid to the US Postal Service.

Contractor License Bond
Many towns require a contractor to have a permit bond to work in that town.  Jersey City requires a bond from all contractors who are not licensed by the state (Electrical and Master Plumbers)

Customs Bond Principal will redeliver any goods that the US Customs Service determines were illegally imported, pay all duties, taxes , fees, charges, , etc.

Detective License Bond

Electrical Contractor License Bond
The New Jersey Division of Consumer Affairs, Board of Electrical Contractors requires all Electrical Contractor Business Permit holders to purchase a $1,000. surety bond.  This bond guarantees the good faith of the electrician to perform the job for the public.

Employee Dishonesty Bond
Guarantees against the dishonest acts of employees.  Guarantees to the employer for the dishonest acts of employees.  If an employee steals money from the employer and it cannot be recovered.

ERISA Bond (Employee Retirement Income Security Act) Businesses that have a profit sharing plan by law are required to carry an ERISA bond.  This bond guarantees the good faith of the administrators of the plan.

Excise Bond — Business that are required to pay taxes to the Federal Government to maintain a license. Distillers, brewers, wine makers, or transporters of these products.

Executor Bond
Guarantees the faithful performance of a executor / executrix named in a will.

Fiduciary Bond
A fiduciary is a person appointed to handle the financial affairs of another who is incapable of handling his own affairs for one reason or another. If the person is a minor or an incompetent person, the fiduciary is called a guardian. If the person is deceased, the fiduciary is called an administrator or executor. If it is a business and the assets are to be distributed amongst its creditors, the fiduciary is called the receiver.

Fiduciaries are usually appointed by the courts. The court appoints a fiduciary when there are assets such as money, securities, real estate, etc. to be distributed. Fiduciary bonds are issued to guarantee the faithful performance of the fiduciaries. The fiduciary is responsible for faithfully performing his duties as specified by the court which appointed him. Often, a fiduciary seeks legal counsel to advise them, therefore reducing their risk and the risk of the insurance company which provided the bond.

Financial Guarantee Bond
A bond guaranteeing that the payments of sums of money *usually for taxes) will be made.

Fire Alarm Contractor License Bond
The New Jersey Division of Consumer Affairs, requires all licensed Fire, Burglar and Locksmiths contractors to purchase a $10,000. surety bond.  This bond guarantees that the contractor will follow the rules and regulations of the board.

Fringe Benefit Bond
Basically the same as a Wage and Benefit bond.  Guarantees to a local union that fringe benefits, such as health benefits will be paid 

Fuel use Tax Bond
Guarantees that the gasoline or fuel retailer or wholesaler will pay the state their tax.

Guardianship - Guardian Bond
Guarantees to the court that the guardian of a minor or incompetent will act in good faith

Immigrant bonds — Refers to migratory workers, students, visiting aliens guaranteeing they they will return to thier countries

Importer Bond
Guarantees that the taxes will be paid to the State or Federal Government

Incompetetent Bond
Guarantees that the affairs of an incompetent will be faithfully administered as appointed by the court.

Janitorial Service Bond
If the owner and employees of a janitorial business are found guilty of theft of a client, then this bond will guarantee payment to the client equal to the loss or to the limit of the bond.

License and Permit Bond
Many municipalities, and counties require that a contractor purchase a bond in order to work in the jurisdiction.  License and permit bonds are usually classified into three classifications, Compliance, third-party protection and guarantee of payments. Requires that the licensed individual operate under the laws and statutes governing that license. Third-party coverage protects the consumer from harmful acts or misrepresentation of licensee. Guarantee of payments ensures that the licensee will pay the required fees and taxes in accordance with the license requirements.

Locksmith Contractor License Bond
The New Jersey Division of Consumer Affairs, requires all licensed Fire, Burglar and Locksmiths contractors to purchase a $10,000. surety bond.  This bond guarantees that the contractor will follow the rules and regulations of the board.

Lost Instrument Bond
Indemnifies the issuer of a duplicate security against claims from anyone claiming to be the owner of the original instrument  - security - stock certificate, etc.

Permit and License Bond
Many municipalities, and counties require that a contractor purchase a bond in order to work in the jurisdiction.

License and permit bonds are usually classified into three classifications, Compliance, third-party protection and guarantee of payments. Requires that the licensed individual operate under the laws and statutes governing that license. Third-party coverage protects the consumer from harmful acts or misrepresentation of licensee. Guarantee of payments ensures that the licensee will pay the required fees and taxes in accordance with the license requirements.

Plumbing Contractor License Bond 
The New Jersey Division of Consumer Affairs, Board of Master Plumbers requires all licensed plumbers to purchase a $3,000. surety bond.  This bond guarantees the good faith of the plumber to perform the job for the public.

Private and public borrowers — Required of private businesses and public borrowers who have obtained grants or loans from the Farmers Home Administration

Probate Bond
Guarantees the estate of a deceased person, minor or incompetent will be faithfully administered as appointed by the court.

Site Plan  - Site Improvement Bond
Guarantees a developer will faithfullly perform the specifications set forth in the subdivision or site plan such as curb, sidewalk, road, and utilities installation.

Street Opening Bond - Road Opening Bond
Guarantees at a contractor or developer will close up the street propertly.  When there is digging in the road to install a water, sewer or other utility line the town, county or state will often require a bond so that the contractor properly closes and paves the street.

Subdivision Bond
Guarantees a developer will faithfullly perform the specifications set forth in the subdivision plan such as curb, sidewalk, road, and utilities installation.

Trustee Bond - Will
Guarantees faithful performance of the trustee named in a will.

Wage and Welfare Bond - Wage and Benefit Bond
Guarantees that the contractor will pay the local union their dues and wages to the employee

Fidelity Bonds Fidelity bonds are technically a form of surety bonds, but are usually considered a distinct product in common usage. They are issued as a guarantee against loss due to employee dishonesty. As such, they are an important part of a company's insurance program, because they cover areas not covered in the company's liability and property coverages. For many businesses, employee's dishonest acts are a principal area of their insurable risks, and fidelity bonds can provide their principal insurance protection.nsurance vs Bonds

Insurance: is a TWO party contract between the insurance company and the insured.  Insurance protects the insured.  (Example: John does purchases an insurance policy for his home.  The insurance company will pay John if his house burns down.)

A bond is THREE party contract between: 1) person or company (principal, who usually purchases the bond) 2) bonding or surety company, 3) entity (obligee) requiring the bond.  Bonds protect the obligee.   (Example: John Doe Inc. purchases a bond as required by law because he his building a municipal sewer plant.  John has trouble and defaults on the job.  The bonding company pays the municipality when John defaults.)

Suretyship is when one answers for the debt, default or miscarriage of another; in a word, a guarantee.    A bond is a three party contract. The parties are the Principal, the Surety and the Obligee.

In insurance, the company contracts only with the insured. If he violates that contract (fails to pay the premium, falsifies an application, etc.), it well may void the contract or give cause for terminating it.   In bonding, the misconduct of one party (the principal) has no bearing on the obligee.  The surety is still bound by the contract, even if it collects no premium, is lied to, or otherwise defrauded.  Needless to say, fraud is much more dangerous to the bonding company than it is to insurance. Therefore, we must evaluate the facts before the surety (bonding company) agrees to issue a bond.

It is well to note that the principal's obligation is always primary to the surety (bonding company). The surety (bonding company) is guaranteeing what he will or will not perform, never any more. Therefore, the surety cannot sustain a loss until the principal self has failed, and we always have recourse against him and his assets after making a payment.

Think of bonding as a service, lending it's name, stability and assets to back up or guarantee the principal. This is not insurance, a loss pool based on the law of large numbers. The rate make-up is not calculated on pooling funds for loss payment, but is calculated as a service charge.  Excepting fidelity, which is more like insurance.

What Can Be Guaranteed Under a Bond?

Legally, almost anything. Usually, there must be a dollar damage involved and it must be something over which the principal exercises a degree of control. You could not obtain a bond guaranteeing that it would not rain the following day. Although there may be a dollar damage to an "obligee" who plans an extensive picnic, the principal, whoever he might be, would not have control over the hazard (the weather). However, the wide range of your imagination can probably develop many instances where a bond could be written. But always keep in mind that it is necessary to find a surety willing to write it!

In brief, bonds are flexible, unlike standard insurance policies that are executed on printed forms, many bonds are drawn up to suit a specific situation. Standard forms have standard terms, standard conditions and exclusions. Most bonds do not. For the most part, the only conditions that govern them are those self-contained in them or in the laws to which they specifically refer.

Bonds are generally divided into two types, Fidelity Bonds and Surety Bonds. Both types differ from Insurance in that they always have three parties as central to the contract, a Principal (the entity or person that might cause the loss), an Obligee (the entity that collects under the bond, should the principal cause a loss), and a Surety (the entity that pays the loss, such as an insurance company).