NJ Prompt Payment Act, Lien Rights & Why Bonds Matter Matter
The Prompt Payment Act for contractors and subs, mechanics lien rights and timeframes, and how payment and performance bonds protect you.
Getting paid is a coverage-adjacent problem
Insurance protects you from claims. Getting paid protects you from going under. NJ gives contractors and subs specific tools, and they interact with bonding.
The Prompt Payment Act
NJ's Prompt Payment Act sets deadlines for payment down the contracting chain — owner to GC, GC to sub — and provides interest and remedies when those deadlines are missed, including the right to suspend work after proper notice. The details matter and the notice requirements are specific; this isn't legal advice, but it's worth knowing the statute exists before you eat a slow-pay.
Mechanics lien rights
NJ's Construction Lien Law lets contractors and suppliers file a lien against the improved property when they're not paid — but the timeframes are strict and the filing requirements are technical. Miss the window and the right evaporates. Again: know it exists, and get proper advice before you need it.
Where bonds come in
On public work and large commercial jobs, payment and performance bonds change the calculus. A payment bond gives subs a claim against the bond when the GC doesn't pay. A performance bond protects the owner if the contractor doesn't perform. Bid bonds get you onto public bid lists. Our bonds intake is a V1 lead-capture today, with full build in V2 — tell us you need a bond and we'll set you up. Most contractors who need bonds also need the rest of the GC program.
This article is general information for NJ contractors, not legal or coverage advice. Your actual policy forms, endorsements, exclusions, and conditions control. For specifics, request a quote or call a producer.
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