How much does a contractor bond cost in Tennessee?
Various cities, counties, and local authorities throughout the State of Tennessee require contractors to post surety bonds. Below are the required bond amounts for popular contractor bonds:
- Home Improvement Contractor Bond: $10,000
- Knoxville Electrical Contractor Bond: $10,000
- Nashville and Davidson County Contractor Bond: $10,000
- Memphis and Shelby County Contractor Bond: $25,000
- Johnson City Building License Bond: $10,000
The surety company issuing the bond determines your premium rate, which is the percentage of the total bond amount you pay as the premium. During the application process, the surety company evaluates your personal credit, financial statements, industry experience, and licensing history.
EZ Surety can issue premiums for Tennessee contractor license bonds for as low as 1% of the required bond amount for applicants with standard credit. If your credit is below average, we can still offer a competitive rate for your contractors license bond.
Why are contractor bonds important in Tennessee?
Contractor license bonds hold licensed contractors accountable for the quality of their work and protect the public from damages they’ve incurred due to the contractor’s violation of licensing laws.
When the surety company issues the bond, they provide a financial guarantee to the local municipality that the contractor will comply with the regulations set forth in the contractor license. If the contractor violates these regulations, causing a loss to the consumer, the consumer can file a claim against the bond.
If the claim is valid, the surety company will cover the costs to repair the damage up to the amount of the bond. The contractor is then liable to reimburse the surety company for all damages paid.
How do I get my general contractor’s license in Tennessee?
To obtain your general contractor’s license in Tennessee you must meet the Tennessee Department of Commerce and Insurance Board for Licensing Contractors requirements by completing the following steps:
- Complete the license application form
- Register your business with the Tennessee Secretary of State
- Provide proof of general liability insurance
- Provide proof of workers’ compensation insurance
- Pass the Tennessee business and law exam
- Pay the $250 licensing fee