The Tennessee Home Improvement Bond is a $10,000 surety bond that a home improvement contractor files with the Tennessee Board for Licensing Contractors to get and keep a home improvement contractor’s license. It is required under Tenn. Code Ann. 62-6-506, part of the state’s Home Improvement Contractors law (Title 62, Chapter 6, Part 5).
The important thing to know first: this license, and therefore this bond, is a limited, local-option program. It does not apply statewide. It applies only in the nine counties that adopted the home improvement licensing law, and only to residential home improvement jobs priced from $3,000 to $24,999. If you work outside those counties, or your jobs are $25,000 or more, this is not your license and this is not your bond (see the disambiguation section below).
The bond is a consumer-protection guarantee. It is made for the benefit of any person who is damaged by the contractor’s breach of a home improvement contract. It is not insurance that protects the contractor.
| Item | Detail |
|---|---|
| Who requires it | Tennessee Board for Licensing Contractors, as a condition of holding a home improvement contractor’s license. Required only in the nine adopting counties, for residential jobs from $3,000 to $24,999 |
| Governing law | Tenn. Code Ann. 62-6-506 (Home Improvement Contractors, Title 62, Ch. 6, Part 5), enacted by Public Chapter 460 (2007); administrative rule Tenn. Comp. R. & Regs. 0680-07-.13 (Bonds) |
| Official form | Tennessee Home Improvement Contractor’s Surety Bond (Board for Licensing Contractors), form reference ContHIBond2010 |
| Bond amount | $10,000, fixed by statute and rule (surety’s aggregate liability for all claims may not exceed $10,000) |
| Premium basis | [CLIENT FLAG: insert All n One premium rate/basis] |
| Coverage term | Continuous until cancelled. The surety may cancel on 30 days written notice by certified mail to the Board and the principal. The bond is not released until at least one year after the license is inactivated, expires, or is revoked, and any claims filed in that period are resolved |
| Obligee | Tennessee Board for Licensing Contractors, for the benefit of any claimant damaged by the contractor’s breach of a home improvement contract |
How much is the bond, and where does it apply?
The bond amount is $10,000. It is fixed by statute and administrative rule, not scaled to the size of the job or the contractor. Under the official bond form, the surety’s aggregate liability for any and all claims may not exceed $10,000. You do not pay that amount. It is the maximum the surety could pay out on claims. You pay an annual premium, which is a fraction of the bond amount.
Where it applies is the part most contractors get wrong. The home improvement contractor’s license is a local-option program: it only takes effect in counties that have adopted it. As currently published by the Board, the license (and this bond) applies in these nine counties:
| County | Home improvement license and bond required? |
|---|---|
| Bradley | Yes |
| Davidson | Yes |
| Hamilton | Yes |
| Haywood | Yes |
| Knox | Yes |
| Marion | Yes |
| Robertson | Yes |
| Rutherford | Yes |
| Shelby | Yes |
| All other Tennessee counties | No home improvement license program. Statewide Contractor licensing rules apply instead (see below) |
[VERIFY currency against the Tennessee Board for Licensing Contractors Home Improvement page: this is a local-option list that counties can adopt or repeal, so confirm the nine counties are current at publish and that none have been added or removed.]
Within those counties, the license is required for residential home improvement work priced from $3,000 to $24,999. Work under $3,000 falls below the threshold, and work of $25,000 or more moves into the separate statewide Contractor license.
What does the bond cover?
The bond protects the homeowner, not the contractor. It guarantees that the contractor will meet its obligations on a home improvement contract, and it gives a damaged consumer a source of recovery if the contractor does not.
- The bond is made for the benefit of any person (claimant) who is damaged by the contractor’s breach of a home improvement contract.
- The surety’s total exposure is capped at $10,000, no matter how many claims are filed.
- The bond does not obligate the surety to complete any home improvement contract. It responds in money to valid claims, up to the penal sum.
- If the bond ceases to be in effect, the home improvement contractor’s license becomes invalid. Keeping the bond active is a condition of keeping the license.
- The bond is a guarantee of the contractor’s conduct, not insurance that protects the contractor. If the surety pays a claim, the contractor is obligated to repay the surety in full.
The bond is not released the moment a license ends. Under the Board’s rule, it stays in place until at least one year after the license is inactivated, expires, or is revoked, and until any claims filed during that period are resolved or dismissed. This gives recent customers a window to bring a claim.
An irrevocable letter of credit for $10,000, issued by an FDIC-insured financial institution, is an accepted alternative to the surety bond under rule 0680-07-.13. [VERIFY against Tenn. Code Ann. 62-6-506 and rule 0680-07-.13: the Board’s Home Improvement page also references a cash or property bond as a form of financial responsibility, but the administrative rule text names only the surety bond and the irrevocable letter of credit. Confirm which alternatives the Board currently accepts before listing cash or property options.]
How much does the bond cost?
You do not pay the full $10,000. You pay an annual premium, which is a percentage of the bond amount and is based mainly on the applicant’s personal credit and business history.
[CLIENT FLAG: insert All n One pricing. Provide the premium rate or flat annual price for a $10,000 Tennessee Home Improvement Bond, ideally with a worked example, for example: “A $10,000 Tennessee Home Improvement Bond typically costs $___ per year for well-qualified applicants.” Do not publish a premium figure until All n One supplies it.]
Because this bond is a fixed $10,000, the premium does not vary by contract size. It varies by the applicant’s qualifications. On a bond this size, many well-qualified applicants pay a low flat annual rate. [CLIENT FLAG: confirm whether All n One offers a flat rate on this bond and what it is.]
Is this the same as a general contractor license bond?
No. This is the most common point of confusion, so it is worth being precise. Tennessee runs two separate programs:
- Home Improvement Contractor license (this page). A local-option program that applies only in the nine adopting counties, for residential jobs from $3,000 to $24,999. It requires this $10,000 surety bond (or an equivalent letter of credit). Governed by Tenn. Code Ann. 62-6-506.
- Contractor license (statewide). A separate, statewide license required before bidding or contracting on any project of $25,000 or more. It does not qualify on a fixed surety bond. Instead, the applicant must submit a reviewed or audited financial statement from a licensed independent accounting firm, and the Board sets a monetary limit based on the applicant’s working capital and net worth. A surety bond is generally not the qualifying instrument for this license, though the Board can require a Guaranty Agreement or bond in specific cases. [VERIFY against the Tennessee Board for Licensing Contractors “Contractor” license page: the financial-statement requirement, the $25,000 threshold, the monetary-limit formula, and exactly when a Guaranty Agreement or bond is required.]
Put simply: if the job is $25,000 or more, you are in Contractor licensing territory and this $10,000 home improvement bond does not cover you. If the job is $3,000 to $24,999 and located in one of the nine adopting counties, the home improvement license and this bond are what apply.
How do I get bonded and licensed as a Tennessee home improvement contractor?
- Confirm the license applies to you. Check that your work is in one of the nine adopting counties (Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford, or Shelby) and that your jobs fall in the $3,000 to $24,999 range. Jobs of $25,000 or more require the separate statewide Contractor license instead.
- Get the $10,000 bond. Request a quote for the Tennessee Home Improvement Bond. Approval is typically based on your credit and business background.
- Pay the premium and receive the executed bond. The surety issues the bond on the Board’s official Home Improvement Contractor’s Surety Bond form, signed and sealed. (An irrevocable letter of credit is an accepted alternative.)
- Complete the Board’s home improvement application. File the application with the Tennessee Board for Licensing Contractors and pay the application fee. [VERIFY against the Board’s Home Improvement application page: current application fee (reported at $250) and whether an exam is required for this license classification.]
- Keep the bond active. The license depends on the bond staying in force. If the bond lapses, the license becomes invalid. Renew the bond so it does not lapse, and renew the license on the Board’s cycle. [VERIFY against the Board’s renewal page: the license is reported to run on a two-year (biennial) cycle; confirm the exact term and renewal window before publish.]
Get a free quote: [CLIENT FLAG: insert live quote link URL] or call 844-425-5666 [CLIENT FLAG: confirm this phone number is correct for this page]
Frequently asked questions
How much is the Tennessee Home Improvement Bond?
The bond amount is $10,000, fixed by statute. You do not pay that amount. You pay an annual premium, which is a fraction of the bond amount, based mainly on your credit and business history. [CLIENT FLAG: All n One to supply the premium price or rate.]
Do I need this bond everywhere in Tennessee?
No. The home improvement contractor license is a local-option program. It applies only in the nine counties that adopted it: Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford, and Shelby. Outside those counties there is no home improvement license, and the statewide Contractor rules apply instead. [VERIFY the current county list against the Board’s Home Improvement page.]
What size jobs does the home improvement license cover?
Residential home improvement work priced from $3,000 to $24,999 in the adopting counties. Work under $3,000 is below the threshold. Work of $25,000 or more requires the separate statewide Contractor license.
Who does the bond protect?
The homeowner. The bond is made for the benefit of any person who is damaged by the contractor’s breach of a home improvement contract. It is not insurance for the contractor. If the surety pays a claim, the contractor must repay the surety in full.
What happens if my bond lapses?
Your home improvement contractor’s license becomes invalid. The bond is a condition of the license, so you must keep it active. The surety can cancel the bond on 30 days written notice by certified mail to the Board and to you, which is why it is important to renew on time.
Can I use something other than a surety bond?
Yes. An irrevocable $10,000 letter of credit from an FDIC-insured financial institution is an accepted alternative under the Board’s rule. [VERIFY against Tenn. Code Ann. 62-6-506 and rule 0680-07-.13 whether a cash or property bond is also currently accepted, as the Board’s website references it but the rule text does not.]
How long does the bond stay on file after I stop working?
The bond is not released right away. It stays in place until at least one year after your license is inactivated, expires, or is revoked, and until any claims filed during that period are resolved or dismissed. This protects recent customers.
Is this the same as a Tennessee general contractor license bond?
No. The statewide Contractor license (for jobs of $25,000 or more) does not qualify on a fixed surety bond. It requires a reviewed or audited financial statement, and the Board sets a monetary limit from your financials. This $10,000 home improvement bond applies only to the smaller-scale home improvement license in the nine adopting counties. [VERIFY the statewide Contractor requirements against the Board’s Contractor license page.]
