Tennessee

Contractor License Bond in Tennessee

Requirements, filing process, and what you should expect to pay, without the broker pitch.

What this bond requires in Tennessee

Tennessee is one of the few states that does not mandate a surety bond at the state license level for general contractors under T.C.A. § 62-6-101 et seq. Financial qualification is demonstrated through a CPA-prepared financial statement; the optional Contractor License Bond ($500K or $1M) only serves as a supplement to working capital/net worth in lieu of a Guaranty Agreement and does not waive other licensing requirements. Home Improvement Contractors operating in the nine adopting counties (Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford, Shelby) must post a $10,000 surety bond, ILOC, cash bond, or property bond per T.C.A. § 62-6-501(4)(A) and related provisions; if the bond ceases to be in effect, the license becomes invalid.

Who requires it

The contractor license bond is required by the Tennessee Board for Licensing Contractors under T.C.A. § 62-6-101 et seq. (general contractors); T.C.A. § 62-6-501 et seq. (home improvement contractors).

How to file in Tennessee

For a standard Tennessee contractor license, no bond is filed with the state Board for Licensing Contractors. Applicants instead submit a CPA-prepared Reviewed or Audited financial statement with the license application. Home improvement contractors operating in the nine adopting counties must file the state-issued $10,000 Home Improvement Contractor Surety Bond (or ILOC/cash/property bond) with the BLC at initial application and keep it continuously in force during licensure; lapse invalidates the license.

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FAQ

Common questions

Is a contractor license bond required in Tennessee?

Tennessee does not require a surety bond at the state license level for general contractors; the Board for Licensing Contractors verifies financial qualification via a CPA-prepared financial statement instead. A separate $10,000 Home Improvement Contractor surety bond is required only in nine adopting counties for residential remodels of $3,000-$24,999.

How much is the bond in Tennessee?

Tennessee does not publish a single flat amount. See the state-specific notes for how it is determined.

Who requires the bond?

The bond is required by the Tennessee Board for Licensing Contractors.

How is the bond filed?

For a standard Tennessee contractor license, no bond is filed with the state Board for Licensing Contractors. Applicants instead submit a CPA-prepared Reviewed or Audited financial statement with the license application. Home improvement contractors operating in the nine adopting counties must file the state-issued $10,000 Home Improvement Contractor Surety Bond (or ILOC/cash/property bond) with the BLC at initial application and keep it continuously in force during licensure; lapse invalidates the license.

What does the bond cover?

Surety bonds protect the obligee, not the principal. If you fail to meet the obligation the bond guarantees, the surety pays the claim and recovers from you.

Is a surety bond the same as insurance?

No. Insurance protects you. A surety bond protects whoever required the bond. You repay the surety for any claim they pay.

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