Electrical Contractor ($40,000) Bond - Nashville and Davidson County, TN in Tennessee

Brief Summary

Metro will not issue an electrical permit until a $40,000 permit bond is on file, and it is one of the last pieces most contractors are missing at the counter. You pay an annual premium instead of tying up $40,000, the bond is written on the Codes Department form with the power of attorney attached, and if you hold more than one trade registration a single $40,000 bond can cover them all.

Metropolitan Code 6.20.150(E) requires every registered electrical contractor, equipment contractor and low voltage contractor in Nashville and Davidson County to file a $40,000 permit bond with the Department of Codes and Building Safety. The amount is flat. It does not slide with contract size. The bond runs to the Metropolitan Government and property owners, it must be written by a U.S. Treasury listed corporate surety or a Tennessee domestic insurance company on the department's own form, and it is continuous with no cancellation on less than ten days written notice to the director of codes administration.

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How to Apply for a Electrical Contractor ($40,000) Bond:

• Business name exactly as it will appear on the Metro registration and on the state license if you hold one.
• Name of the licensed master electrician who is the individual of record, since registration is not issued without one.
• Owner and principal information for the surety's underwriting review.
• Complete the bond application and review the quoted premium.
• Receive the executed $40,000 permit bond on the Codes Department form, notarized, with the surety's power of attorney attached.
• File the bond with the Codes and Building Safety registration package: the registration form, the $300,000 general liability certificate, the Davidson County business license and the affidavit.
• State licensed contractors also submit the state license showing number, limitations and classifications, the state affidavit naming the qualifying agent, and the $150.00 electrical registration license fee.

Detailed Information About the Tennessee Electrical Contractor ($40,000) Bond:

Flat $40,000, and not the tiered permit bond

The number people get wrong comes from mixing two different Metro bonds. Section 16.04.090(B) sets the general contractor permit bond at ten thousand dollars for building permits under twenty five thousand dollars and forty thousand dollars for permits of twenty five thousand dollars and larger. That tier does not apply to the trades. Section 6.20.150(E)(1) says flatly that the electrical contractor, equipment contractor or low voltage contractor must furnish a permit bond in the amount of forty thousand dollars. Small jobs do not get a smaller bond.

One useful piece of relief is in 16.04.090(G): contractors with multiple trades may provide one forty thousand dollar bond to meet the requirements of the listed code sections, which include 6.20.150. If you hold electrical plus mechanical or plumbing registrations, you are not buying a stack of bonds.

What the bond actually promises

It is conditioned on conforming to the electrical chapter and all applicable Metro laws, ordinances, rules and regulations for work performed under a permit issued on that bond, and for work performed where a permit should have been obtained before the work started. That second half matters. Pulling no permit does not put you outside the bond. It indemnifies both the Metropolitan Government and property owners.

The bond is continuous. It cannot be canceled on less than ten days prior written notice to the director of codes administration. Surety liability keeps attaching to work performed under any permit issued before the termination date even when the noncomplying act happens after that date, and liability never stacks across years. Total exposure stays at forty thousand dollars no matter how long the bond runs.

Who has to post it, and who does not

Registration is what triggers the bond. Under 6.20.140 anyone who contracts for the installation, repair, addition or alteration of an electrical system requiring a permit must register with the Codes Department, and under 16.20.190 no electrical permit is issued to anyone who is not registered as a metropolitan electrical contractor, with narrow carve outs for registered equipment installers and registered low voltage contractors working within their own scope. A maintenance electrician cannot pull permits at all.

A resident homeowner doing the work personally inside his own property lines is not a registered contractor and does not post this bond, though 16.20.040 still requires the permit and the fee, and 16.20.200 requires the homeowner to satisfy the board of electrical examiners and appeals as to his knowledge and ability, by written or oral exam.

There is a grandfather clause, but it is old and it is about registration status rather than the bond. Under 6.20.130(F) and (I), anyone validly registered as a metropolitan electrical contractor or electrical equipment contractor on June 4, 1991 carried that registration forward, and 6.20.150(E)(2) gave those existing registrants one hundred twenty days from adoption to file the bond. Nobody registering today is grandfathered out of anything.

The things that are not the bond and still have to be filed

A $40,000 bond alone will not get you registered. Section 6.20.150(F) requires a certificate of general liability insurance from a Tennessee licensed company with a minimum of three hundred thousand dollars per occurrence, combined single limit for bodily injury and property damage, and it cannot be canceled on less than thirty days written notice. Section 6.20.150(G) requires proof of all required privilege licenses, and 16.04.090(D) requires the Davidson County contractor's privilege license. The Metro registration form also calls for the Davidson County business license and the affidavit.

Section 6.20.130(E) is the one that stops applicants cold. No one is registered as an electrical contractor unless the individual holds a current master electrician's license or the business employs the full time services of a licensed master electrician, and 6.20.130(M) defines full time services strictly: reporting to the contractor's place of business during normal working hours, receiving the same benefits as other employees, and having federal withholding, FICA and workers compensation paid by the contractor. A contract or a part time arrangement will not satisfy it.

A Tennessee state contractor license does not remove any of this. A state licensed contractor still registers with Metro, and the Codes Department's state trades registration form lists the state license showing number, limitations and classifications, the state affidavit naming the qualifying agent, the $40,000 Metropolitan permit bond notarized with power of attorney, the $300,000 general liability certificate and the Davidson County business license, with a registration license fee of $150.00 for electrical.

Dates

The bond itself is continuous rather than a term that lapses. What expires is the license behind the registration. Under 6.20.110 each license issued by the board expires on the last day of March and must be renewed and recorded on or before the first day of April each year. Late renewal is accepted for one year, with the regular fee plus ten percent of that fee for each calendar month or part of a month of delinquency. A license not renewed within one year is revoked and the holder has to reapply. Master electrician fees are $50.00 to examine, $150.00 for the original certificate and $100.00 to renew. The contractor registration itself carries no examination or certificate fee in the 6.20.100 table.

Eligibility and Requirements for a Tennessee Electrical Contractor ($40,000) Bond:

• Bond amount of exactly $40,000. There is no smaller amount for small jobs.
• Surety must be a U.S. Treasury listed corporate surety or a Tennessee domestic insurance company.
• Written on the form provided by the Department of Codes and Building Safety, Metro form DCAB7 revised February 2010 or later, with the power of attorney kept attached.
• Bond name must match the state license name exactly where a state license applies.
• Continuous bond, cancelable only on at least ten days prior written notice to the director of codes administration.
• One $40,000 bond may satisfy multiple trade registrations for a contractor holding more than one.
• Separate and not satisfied by the bond: $300,000 per occurrence general liability from a Tennessee licensed company, cancelable only on thirty days notice.

Tennessee Electrical Contractor ($40,000) Bond FAQs:

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