Gas / Mechanical Contractor ($40,000) Bond - City of Hendersonville, TN in Tennessee

Brief Summary

Gas and mechanical contractors pulling permits in Hendersonville post a flat $40,000 permit bond no matter how small the job is. The contract price rules that set the $10,000 and $50,000 building bonds do not apply to trade work. One bond on file with the Department of Codes Administration covers every permit you pull in the city, and you pay an annual premium instead of tying up $40,000 in cash.

The City of Hendersonville requires every contractor and subcontractor to keep a valid permit bond on file before permits are issued. For electrical, plumbing and gas/mechanical work the minimum is $40,000 regardless of contract amount. The bond is written on the city's own Permit Bond form, names the City of Hendersonville, Sumner County, Tennessee as obligee, and must be in the same name as the contractor's state license and permit.

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How to Apply for a Gas / Mechanical Contractor ($40,000) Bond:

• Legal business name exactly as it appears on your Tennessee license and your Hendersonville permit.
• Owner name, home address and Social Security number for the surety's credit review.
• Complete the bond application and review the quoted annual premium.
• Receive the $40,000 bond on the City of Hendersonville Permit Bond form with the surety's Power of Attorney attached.
• File the original bond with the Department of Codes Administration, 101 Maple Drive North, Hendersonville, TN 37075.
• Provide proof of workers compensation insurance or a notarized exemption affidavit to the Building Department.

Detailed Information About the Tennessee Gas / Mechanical Contractor ($40,000) Bond:

Who has to post this bond

The Hendersonville Building Department requires all contractors and subcontractors to have a valid and current permit bond from a surety company on file. Building contractors are bonded by contract value, $10,000 for work under $25,000 and $50,000 for work of $25,000 and over. Electrical, plumbing and mechanical contractors are treated differently. Their minimum is $40,000 regardless of contract value, so an HVAC changeout or a gas line extension carries the same bond as a large commercial mechanical job.

What the bond guarantees

The city's form conditions the bond on the principal complying with all codes, laws and ordinances of the City of Hendersonville, including those covering building, plumbing, gas/mechanical, housing, fire, health, zoning, and excavation and construction in the public right of way. It also answers for damage the contractor's work causes. The surety's total liability for all claims is capped at the $40,000 penalty and does not stack year over year.

Getting the details right

The principal name on the bond must match the state license and the permit exactly. A mismatch between an LLC name and a trade name is the most common reason a bond gets sent back. The bond must be issued on the city's Permit Bond form with the surety's Power of Attorney attached. It runs continuously until cancelled, and the surety must give the Department of Codes Administration at least ten days written notice by certified mail or personal service before cancellation takes effect.

State license and other items

The city's form notes that a valid state contractor's license is required on all bids or contracts of $25,000 or greater for electrical and mechanical contractors, pursuant to T.C.A. 62-6-102. The bond does not replace that license. The Building Department also asks for proof of workers compensation insurance or a notarized exemption affidavit, with the certificate issued to the City of Hendersonville Building Department, and a city business license may be required even for contractors based outside the city.

How premium is set

The premium is a percentage of the $40,000 penalty set by the surety after reviewing the owner's personal credit and, for some applicants, business financials and claims history. Stronger credit earns a lower rate. The premium is paid annually to keep the continuous bond in force.

Eligibility and Requirements for a Tennessee Gas / Mechanical Contractor ($40,000) Bond:

• Bond amount of at least $40,000 for gas/mechanical work, regardless of contract value.
• City of Hendersonville, Sumner County, Tennessee named as obligee on the city's Permit Bond form.
• Principal name identical to the state license and permit.
• Surety Power of Attorney attached to the bond.
• Tennessee contractor license for mechanical bids or contracts of $25,000 or more under T.C.A. 62-6-102.
• City of Hendersonville business license where applicable.

Tennessee Gas / Mechanical Contractor ($40,000) Bond FAQs:

Official and Additional Resources for the Tennessee Gas / Mechanical Contractor ($40,000) Bond: