New Jersey (NJ) Public Official Bonds
A New Jersey PUBLIC OFFICIAL BOND is a type of licensing bond that provides protection for the public from the actions affected and or influenced by public officials withing the State of NJ. These bonds are required for any elected official or appointed officials. The bond guarantees that the principal will faithfully and honestly perform all the duties of the office and will comply with the law.
There are three parties to a bond:
- Principal – The public official (The principal’s name will appear on the bond. If that person is not in compliance with the law, then the bonding company (surety) will respond and make good as required by the State of NJ / government (obligee)
- Obligee – Government, State being serviced by the official
- Surety – Bonding company that write the bond and is the secondary obligor
The bond indemnifies those parties that have suffered a loss as a result of the official’s misconduct. The bond protects the government entity and provides coverage to the public. The bond protects the government and citizens served by the public official.
There are three types of Public Officials
- School Business Administrator
- Violations Clerk
- Municipal Judge, etc.
The official does not routinely handle money
Bond guarantees the official will not make mistakes or neglect their duties
2. Those who handle Funds
- Tax Collector
- Utility Collector
Bond primarily guarantees the public that all public funds will be protected from everything except acts of God
3. Those who have direct involvement with the General Public
- Public Notary
The bond guarantees that the public official will not breach their authority or commit wrongful acts
- Notary – compliance with the law
- Secretary – faithful performance of job
- Tax Collector – will perform the duties and remit taxes to the government
- Township Managers / Directors – faithful performance of duties
- Treasurer – faithful performance and safekeeping of funds
- Alcohol Tax – liquor sales taxes will be paid on time to the state
- Cigar – Cigarette Tax – comply with state regulations in sales and sales taxes will be paid on time to the State
- Fuel Tax – Fuel Use – Fuel Distributor – payment of taxes
- Sales Tax – sales taxes will be paid on time to the State
Cost of a Public Official Bond
- For Custodian of school moneys the rate is $3.00 per thousand Example: (If a bond is required to protect up to $50,000. then the annual cost of the bond is $150.
- For other positions, such as office manager, board secretary, CFO bonds over $100,000. the cost is $3.50 per thousand Example: (If a bond is required to protect up to $150,000. then the annual cost of the bond is $525.
- Bonds over $100,000. require a personal financial statement from the applicant
This agency uses CNA Surety, one of the largest bonding companies in the US, they are AM Best “A” rated.