Tennessee Contractor License Bond

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What is a Tennessee contractor license bond?

A contractor license bond protects the interests of a contractor’s clients. It ensures clients are compensated if their contractor doesn’t follow the parameters of the work agreement (including breaking regulations). Clients may request compensation by submitting a claim to the surety of the bond. 

Home improvement contractors in Tennessee must obtain a state license and a contractor license bond. Many local authorities also require contractors to be licensed and bonded. The major cities where this is the case are listed below, along with the state-wide home improvement bond requirement:

  • Tennessee home improvement contractor bond: $10,000 bond amount
  • Johnson City building license bond: $10,000
  • Knoxville electric contractor bond: $10,000
  • Memphis contractor license bond: $25,000

You may have additional licensing and bonding requirements in your workplace jurisdiction. Contact your city or county for complete details, or reach out to ZipBonds directly for help.

Learn more about how contractor license bonds work in our complete guide

Get Your Tennessee Contractor License Bond:

Tennessee Contractor License Bond Costs

To obtain and maintain a contractor license bond, applicants pay an annual premium. This is usually a small percentage of the total bond amount. The premium typically ranges from 1%-5% for those with excellent credit in Tennessee. Other factors your underwriter may consider when determining your premium rate include: 

  • Business finances
  • Assets and liquidity
  • Industry experience 

Contractor license bonds are quickly issued and typically cost as low as $100.

Frequently Asked Questions

You need a license to bid as a prime contractor on a project above $25,000 in Tennessee. You’ll also need a license if you’re an electrical, mechanical, plumbing, HVAC, roofing, or masonry contractor with a project portion above $25,000. The Tennessee Department of Commerce and Insurance (DCI) regulates the licensing process for these types of contractors.

Home improvement contractors may also need to become licensed and follow the requirements in their specific jurisdiction.

If you fail to follow applicable laws in your work, someone may file a claim against your bond. Injured clients can ask for compensation up to the bond’s penal sum (the total bond amount). If the case is legitimate, you must comply and reimburse the client. 

The surety may cover all costs initially. However, the bond language defines that you must repay the surety in full as the contractor. Bond claims represent a significant financial and reputational threat, and it’s best to avoid them entirely by complying with all work regulations.

Get Your Contractor License Bond in Tennessee

ZipBonds offers the fastest and most secure option for getting bonded. Our all-digital platform is intuitive and straightforward. Apply online, email support@zipbonds.com or call 888.435.4191 to speak with an agent directly.


About ZipBonds.com

Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”

Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.