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Tennessee Contractor Bonding Requirements

Home Improvement: $10,000 Bond REQUIRED

Tennessee has two distinct licensing systems: Home Improvement Contractors ($3K-$25K) require $10,000 bonds. Contractor Licenses ($25K+) use financial statements - bonds optional. Understanding which license you need is critical for Tennessee compliance.

KEY DISTINCTION

Projects $3K-$25K: Bond mandatory • Contractor Licenses ($25K+): Financial statement based

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Home Improvement
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Tennessee License Types & Bond Requirements

Two distinct licensing paths with different requirements

Home Improvement
Most Common
Project Scope
$3,000 to $24,999
Bond Required
YES - $10,000
Exam Required
No
Unlimited
Project Scope
No project limit
Bond Required
Financial statement based
Exam Required
Yes
Limited Residential
Project Scope
Up to $125,000
Bond Required
Financial statement based
Exam Required
Yes
Specialty
Project Scope
Specific trades
Bond Required
Financial statement based
Exam Required
Yes
Home Improvement

Projects $3,000 - $24,999

$10,000
Bond REQUIRED
Tennessee Home Improvement License required
$10,000 surety bond MANDATORY
General liability insurance
Workers compensation or exemption
No exam required
Does NOT cover electrical, HVAC, plumbing
Contractor License

Projects $25,000+

Financial Statement
Bond NOT required
Tennessee Contractor License required
Financial statement requirements
Optional bond ($500K-$1M) to supplement
Trade exam AND business/law exam
General liability insurance
Workers compensation or exemption

How to Get Your Tennessee License

5 steps to Tennessee Board licensing

1

Determine License Type

Home Improvement ($3K-$25K) or Contractor License ($25K+)

2

Pass Exams (if required)

Contractor Licenses require business/law and trade exams

3

Obtain Bond

Home Improvement: $10,000 REQUIRED. Contractor: Financial statement based

4

Submit Application

Tennessee Board with experience documentation and fees

5

Receive License

Processing typically takes 4-8 weeks

Frequently Asked Questions

Understanding Tennessee's two-tier licensing system

Does Tennessee require a contractor license bond?+
Tennessee has two distinct systems: Home Improvement Contractors ($3K-$25K projects) MUST have a $10,000 bond. Contractor Licenses ($25K+ projects) do NOT require bonds for licensing - they use financial statements instead. Contractors with insufficient financial statements may optionally post $500K-$1M bonds to supplement their qualifications.
What is the Tennessee Home Improvement Contractor bond?+
Home Improvement Contractors working on projects between $3,000 and $24,999 must maintain a $10,000 surety bond (or cash/property bond/ILOC). This bond protects consumers from breach of contract. The license does NOT cover electrical, gas, mechanical, HVAC, or plumbing work, which require separate trade licenses.
How much does a Tennessee home improvement bond cost?+
Tennessee home improvement contractor bonds ($10,000) cost $100-$300 annually depending on credit score and business financials. Most contractors with good credit pay $150-$200 per year. The bond must be filed with the Tennessee Board and maintained continuously for 12 months after license expiration or replacement.
Does Tennessee require a contractor exam?+
Yes, Tennessee requires contractors to pass both a business and law exam plus a trade-specific exam for their license classification. The exams test knowledge of Tennessee construction law, business practices, and technical trade skills. Exam preparation courses are strongly recommended.
What is the difference between Home Improvement and Contractor licenses?+
Home Improvement licenses ($3K-$25K projects) require a $10,000 bond and no exam. Contractor Licenses ($25K+ projects) require trade/business exams and financial statements but NO bond (unless supplementing weak financials). Unlimited contractor licenses cover projects over $3 million. Limited Residential (BC-A/r) licenses cap at $125,000 residential work.
How long does Tennessee contractor licensing take?+
Tennessee contractor licensing typically takes 4-8 weeks for initial applications after passing exams and submitting all required documents. Processing time depends on completeness of application and current Board workload. Bonds can be obtained instantly while waiting for license approval.

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Official Resources

Tennessee Board
Phone:(615) 741-8307
Address:500 James Robertson Parkway, Nashville, TN 37243
Visit Board Website
Legal Authority
Governing Statute:
Tennessee Code Annotated Title 62, Chapter 6
View TN Code

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2. Performance Bond

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