Tennessee Home Improvement Contractor (HIC) Bonds
Tennessee Home Improvement Contractor Bond Information
The Tennessee Home Improvement Contractor's Surety Bond is required by the Tennessee Board of Commerce and Insurance Board of Licensing Contractors. The bond is issued for the benefit of all owners, as defined by Tennessee Code Annotated, Title 62, Chapter 6, undertaken by the principal in the amount of $10,000.
The surety bond is mandated by state statute for all who are licensed as Home Improvement Contractors in the state. The bond ensures that the bonded principal complies with Title 62, Chapter 6, of the Tennessee Code, and the regulations promulgated thereto. The surety company may cancel this bond by providing 30 days notice to the Tennessee Board for Licensing Contractors.
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What Does a Home Improvement Contractor Bond Protect Against?
The applicant/ principal is required to file this bond in order to secure a license under the provisions of Public Chapter 460, Title 62, chapter 6, Section 506 of Tennessee Code Annotated. The surety bond guarantees compliance with Title 62, Chapter 6, of Tennessee Code Annotated, and all pertinent regulations. The bond may not be construed to require the surety company to be responsible for damages arising from any breach of a home improvement contract if such contract was entered into after the inactivation, expiration or revocation of the contractor's license. This bond is continuous in nature, however, each annual renewal period or portion constitutes a new bond term. Regardless of the number of years this bond may remain in force, the liability to the surety company will not exceed the bond limit.
Getting Your Tennessee Business License or Registration
In Tennessee, a Home Improvement Contractor license is required for remodeling projects in many counties when the project cost is between $3,000 and $24,999. The Home Improvement license is a way for contractors to show professional credibility in the state by being licensed, bonded and insured. The following is an overview of the basic steps required to secure a license;
- Pay the application fee for the two (2) year license
- Secure name approval through the Secretary of State
- Furnish a surety bond or other proof of financial responsibility in the amount of $10,000
- Proof of Insurance as required
- Disclosure of any of the following: unlicensed activity, judgments, complaints, licenses, businesses, addresses, revocations, experience, etc.
- Information of any and all addresses of entity and owners is required.
- Supply a copy of the written contract to be used when contracting with consumers.
- An interview with the Board may be required in certain cases
- Read the rules and law, including important contract requirements, advertising and payment guidelines.
Other Helpful Information and Links
The Tennessee Board for Licensing Contractors is tasked with assuring quality and fair construction practices for all phases of the industry in order to protect the safety and welfare of the public. The Board was originally established in 1931, and serves as a bridge between consumers and contractors in Tennessee. Licensing and bonding offers the consumers a mechanism to voice their concerns. A contractor's license is required prior to contracting (bidding or negotiating a price) whenever the total cost of the project is $25,000 or more.