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Tennessee Contractor License Bond

Before you can start your career as a Tennessee contractor, you must meet one essential requirement: get a license. Tennessee requires contractors to have a license as a way to keep sub-par contractors out of the industry. Only those contractors who can meet the licensure requirements can operate legally, and anyone who operates without a license could face stiff penalties. Knowing that should make getting a license your first and top priority. Will you need a Tennessee contractor license bond? We will cover that information below and explain how bond requirements affect contractors throughout Tennessee.

Who Needs a Tennessee Contractor License Bond?

Some but not all contractors in Tennessee will need to obtain a contractor license bond before being granted a license. The requirement to be licensed and bonded applies to contractors in these counties:

• Bradley
• Davidson
• Haywood
• Hamilton
• Knox
• Marion
• Robertson
• Rutherford
• Shelby

How Does a Tennessee Contractor License Bond Work?

All different surety bond types hold one party accountable when they don't follow mandates established by another party. In the case of Tennessee contractor license bonds, the bond agreement holds the contractor liable for damages that result from illegal or unethical behavior. Anyone hurt by that misconduct may file a claim against the bond for compensation equal to the damages.

Provided that the claim has merit, the company that issues and backs the bond guarantees it will pay the claim in full. However, under the bond agreement, the financial liability for claims falls on the contractor who caused them, so that contractor must repay the bond company with interest and fees added to the debt. Failure to pay results in the debt entering collections.

Why Are Tennessee Contractor License Bonds Required?

Most states make surety bonds a part of the licensure process as a way to enforce state laws and encourage upstanding behaviors. Since contractors must pay for damages they cause, they have a strong incentive to follow all applicable rules and perform quality work. Bonds also give the victims of unscrupulous contractors a means to pursue and receive damages. The Tennessee contracting industry runs better for all, contactors included, thanks to surety bond requirements.

How to Get a Contractor License Bond in Tennessee

Obtaining a surety bond doesn't have to be a headache as long as you work with the right surety agency. That's why finding one to work with should be your initial step. After that, you will follow these steps to obtain the State of Tennessee contractor's license bond required for a license:

1. Complete a bond application.
2. Undergo a credit check.
3. Receive a quote for the bond price.
4. Pay the price to activate the bond.
5. Give proof of bond coverage to the licensing agency.

How Much Will a Tennessee Contractor License Bond Cost?

Surety bonds cost a small percentage of the bond's total coverage amount. That means a bond valued at $10,000 will cost less than $500 in most cases. The final cost depends on the bond seeker's credit. People with strong credit will pay less. Bad credit, on the other hand, leads to higher bond costs and makes some bond providers refuse to extend coverage. Not Viking Bond Service. Thanks to our bad credit surety bond program, more contractors get approved for bonds at fair rates even with credit issues.

Does a Tennessee Contractor License Bond Need Renewal?

Bond coverage lasts for 12 months. It expires after that, and if the coverage is not renewed before the expiration date, it jeopardizes the status of your Tennessee contractor license. Since a contractor's career depends on having an active license in good standing at all times, bond coverage cannot lapse for any reason.

The easiest way to prevent unintended problems is by renewing bonds. The bond provider will give advance notice of the expiration date. During renewal, you will undergo another credit check that could raise or lower bond prices depending on changes to your credit standing. Pay the updated bond cost to renew coverage for another 12 months.

Are There Other Kinds of Tennessee Contractor Bonds?

Contractors often need other kinds of surety bonds as a condition of the contracts they sign to perform work. Those surety bonds hold the contractor accountable for meeting the terms of the contract. If, for example, the contractor does not complete the work on time or within budget, the other party in the contract may pursue a claim against the surety bond.

Different types of surety bonds cover different types of liability, and contractors often need multiple bonds for each project they work on. That may include bid bonds, performance bonds, supply bonds, and others. Contractors can't finalize a contract until they have all the bonds required, so it's important to meet those requirements promptly. Ideally, the same surety agency that helps you get your Tennessee contractor license bond can also help with any and all future bonding requirements.

Viking Bond Service – A Bond Partner for Tennessee Contractors

Viking Bond Service strives to be the surety agency that contractors can count on, the first time they need a bond and every time after. We make bonding simple, fast, accessible, and affordable. It's no wonder why so many contractors across Tennessee make us their bond provider of choice.

Whenever you need a bond, request a quote from Viking Bond Service – day or night – and you can generally expect a quote in under 24 hours. We are also happy to answer your questions and provide whatever information you need. Please call us at 1-888-2-SURETY (1-888-278-7389) or contact us.