N.J. Stat. Ann. § 18A:39-6

Liability insurance covering the operation of every bus transporting pupils to and from schools and the drivers thereof or other appropriate similar coverage shall be furnished by each contractor or, in the case of any bus owned and operated by a board of education, by the board of education, in such amounts, with such indemnity, with such coverage, and in such manner, as shall be prescribed by rule of the state board.