New Jersey contractor insurance requirements

Workers' comp in New Jersey

Almost every New Jersey employer must carry workers' comp, including for part-time and seasonal workers. Corporate officers are included. Partners, LLC members and sole proprietors without employees are not, unless they choose coverage.

The agency in charge is the New Jersey Division of Workers' Compensation. It can tell you whether a specific business needs coverage, and most states let you look up an employer's policy online.

Contractor licensing and insurance

New Jersey home improvement contractors must register with the Division of Consumer Affairs and carry commercial general liability of at least $500,000 per occurrence.

Indemnity and additional insured clauses

New Jersey's anti-indemnity statute (N.J. Stat. Ann. §§ 2A:40A-1, 2A:40A-2) voids construction contract clauses that make a contractor indemnify another party for that party's sole negligence. Clauses that cover shared fault are generally allowed.

What to check on a contractor COI for a New Jersey project

1. Workers' comp. Nearly every contractor with employees needs it in New Jersey. A contractor with a crew and no workers' comp on its COI is a gap. For an out-of-state contractor, confirm New Jersey is listed on the workers' comp policy.
2. General liability. A New Jersey license only shows the contractor met the state's floor. Compare each limit on the COI with your project requirements, which are usually higher.
3. Additional insured. The endorsement is a separate promise from the indemnity clause, so check both. Ask for the endorsement itself, not just a box ticked on the certificate.
4. Dates. Every policy should run through the end of the job. A COI only shows coverage on the day it was issued, so check again at each renewal.

Forsured checks every contractor COI against your project requirements, then keeps checking for the life of the project. Send us one project's requirements and a contractor COI or two for a free COI risk check.