Tennessee Contractor and Home Improvement License Bonds

The $10,000 Home Improvement bond and the adopting counties

Currently, the Home Improvement license applies only in the counties that adopted the law: Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford, and Shelby. Home improvement is defined in T.C.A. 62-6-501(4)(A). To meet the $10,000 requirement you can post a surety bond, a cash or property bond, or an irrevocable letter of credit. The Board publishes a sample letter-of-credit form that may be supplied in lieu of the $10,000 surety bond. That letter of credit must come from a bank covered by the FDIC, can be cancelled by the bank by giving the Board and the licensee thirty days' written notice by certified mail, and must stay on file for one year after the license expires or is inactivated. The Home Improvement license also requires general liability and workers' compensation coverage. The fee for an initial Home Improvement application is $250, and renewal is $200.

What the Board's posted bond form says

The Board posts a bond form titled "TENNESSEE CONTRACTOR’S SURETY BOND." On that form, the principal is bound to the State of Tennessee for the benefit of a person who is damaged by an act or omission that breaches a construction contract, or by an unlawful act or omission in the performance of contracting. The form says "a person who is damaged"; it does not use the word consumer. Under the form, a claim must be brought by court action within one year after the expiration of the license period during which the act or omission occurred. The bond term is continuous, but each annual renewal period counts as a new bond term, and the surety's liability is not cumulative. The surety may cancel the bond by giving the Board and the principal thirty days' notice by certified mail, and a power of attorney from the insurance company must be attached. That same form references Public Chapter 1039 (2026), T.C.A. 62-6-111, and describes a license "as a Contractor" where the principal has elected to obtain a surety bond for licensure. The Board's Forms and Downloads page links this same form under the name "Home Improvement Surety Bond," but the form's text refers to a Contractor license, so it is not confirmed whether the $10,000 home improvement bond uses this exact form — confirm the correct form with the Board.

Steps

1. Choose your license class. Decide whether your work falls under the Home Improvement license (residential remodeling $3,000–$24,999 in an adopting county) or the Contractor license (projects of $25,000 or more as a prime contractor, certain subcontractor, or construction manager/consultant).
2. Check your county. The Home Improvement license applies only in Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford, and Shelby counties.
3. Pick how you'll meet the requirement. For Home Improvement, choose a $10,000 surety bond, a cash or property bond, or an irrevocable letter of credit; for the Contractor license, choose a CPA financial statement or, from July 1, 2026, a surety bond of at least 50% of your monetary limit.
4. If you choose a surety bond, get it from a surety. The surety issues the bond and sets what you pay. What you pay is a small share of the bond amount, set by the surety from your credit and business details.
5. Submit your application. Apply to the Board with your Home Improvement financial responsibility, or your Contractor financial statement or Contractors’ Surety Bond; general liability and workers' compensation are also required (the Contractor license allows proof of a workers' comp exemption), and the initial Home Improvement fee is $250 with renewal at $200.
6. Keep the bond in force. If you use the Contractor license bond option, the Board's Contractors’ Surety Bond form treats the bond as continuous with each annual renewal as a new term, and the surety can cancel on thirty days' certified-mail notice.

Sources

• Tennessee Board for Licensing Contractors
• Home Improvement License
• Get a Contractor License
• Fees
• Forms and Downloads
• Rules and Laws
• Tennessee Contractor's Surety Bond form (SuretyBond.pdf)
• Home Improvement Irrevocable Letter of Credit form (ContHIIRLOC.pdf)

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