Tennessee Surety Bonds

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Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your Tennessee surety bond needs.

Required Surety Bonds in Tennessee

Typical Tennessee bonds include (click on any for more info):

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Required Surety Bonds in Tennessee

All Tennessee surety bonds can be categorized as one of the following: construction and contractor bonds, license and permit bonds, or court bonds.

Tennessee Construction & Contractor Bonds

Tennessee has its own version of the federal Miller Act, which requires contractors working on federally-funded projects valued above $100,000 to purchase performance and payment bonds. Tennessee’s “Little Miller Act” requires a payment bond for at least 25% of any state-funded project valued at $100,000 or more.

Tennessee License & Permit Bonds

Tennessee requires licensing of more occupations and professions that nearly any other state. Licenses are issued by the regulatory boards and divisions within the Tennessee Department of Commerce and Insurance. In many cases, purchasing a license and permit bond is a mandatory step in the licensing process. A license and permit bond ensures that the principal will conduct business in a lawful and ethical manner.

Tennessee Court Bonds

Any court in Tennessee can order someone with business before the court to purchase a surety bond—specifically, an appeal bond or a probate bond. An appeal bond may be required from parties appealing a court decision, particularly if the case involves contested property or a large damages award. A probate bond—sometimes called a fiduciary bond—may be required from parties named to manage another person’s finances, such as an executor of an estate or a custodian for an incapacitated adult.

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Our team of surety bond professionals will gladly help you get any type of Tennessee surety bond you might need at a competitive rate.

Frequently Asked Questions

There are three parties to every surety bond agreement, which is a legally binding contract:

  • The “obligee” is the state or local agency requiring the surety bond.
  • The “principal” is the party required to purchase the bond.
  • The “surety” is the company underwriting and issuing the bond.
  • The obligee sets the required amount of the bond, which is the maximum amount that will be paid out on a claim. The obligee also spells out the conduct required of the principal in order to avoid claims against the surety bond.

Any party who suffers a financial loss because the principal has violated the terms of the bond has the right to file a claim against the bond. The principal is solely responsible for paying all valid claims.

However, the surety will often pay a claim and wait to be reimbursed by the principal. This ensures timely settlement of the claim and gives the principal some time to gather the necessary funds.

What the principal in a bond agreement actually pays for a surety bond is a small percentage of the required bond amount established by the obligee. That percentage, known as the premium rate, is determined by the surety company based on the applicant’s credit score and other indicators of the likelihood of claims being filed against the bond. Those with good credit can expect a rate of 1-3%. Those with poorer credit may pay a higher premium.
No claim against a bond will be paid until the surety company has investigated and determined that it is valid. After making payment to a claimant, the surety company will demand reimbursement from the principal.