Defensive Driving School ($7,500) Bond - Statewide in Tennessee

Brief Summary

The $7,500 bond is one of two financial items the Tennessee Department of Safety and Homeland Security wants before it approves a defensive driving course provider. The other is $300,000 of liability insurance, and applicants often line up one and forget the other. The bond itself is a yearly premium, not $7,500 in cash, and it is usually issued the same day.

Tennessee Comp. Rules and Regs. 1340-01-04-.05 requires every defensive driving course provider to carry a continuous surety bond in the principal sum of $7,500, written by a company approved by the Department and authorized to do business in Tennessee. The bond protects the contractual rights of students. Providers must also carry $300,000 in liability insurance and submit the Department's application with a $150 certified check or money order.

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How to Apply for a Defensive Driving School ($7,500) Bond:

• Request the provider application from the Department of Safety and Homeland Security Driver Improvement Section.
• Have the provider's legal business name exactly as it will appear on the application.
• Owner name, home address and Social Security number for the credit review.
• Complete the bond application, pay the premium and receive the signed $7,500 continuous bond.
• Obtain the $300,000 liability insurance policy with ten days' cancellation notice to the Department.
• Submit the application, bond, proof of insurance and a $150 certified check or money order to the Department.

Detailed Information About the Tennessee Defensive Driving School ($7,500) Bond:

Two financial requirements, not one

Rule 1340-01-04-.05, part of Tennessee's Driver Improvement Program rules, sets out what a defensive driving course provider needs before the Department of Safety and Homeland Security will approve it. The surety bond is $7,500, flat, with no tiers. Separately, the provider must carry $300,000 in liability insurance, and the insurer has to give the Department ten days' notice before cancelling it. The bond does not stand in for the insurance, and the insurance does not stand in for the bond.

The rule contains no exemption from the bond. Every provider posts it.

What the bond covers

The rule describes the bond as being for the protection of the contractual rights of students. If a provider takes a student's money and fails to deliver the course or the completion certificate the student paid for, the student can look to the bond. The surety's aggregate liability is capped at the $7,500 principal sum. The bond is continuous, meaning it stays in force until cancelled, and the surety must give the Department thirty days' written notice before cancelling. A lapse in the bond puts the provider's approval at risk.

Other conditions of approval

The provider files an application supplied by the Department with a certified check or money order for $150. It must provide an eight hour defensive driving class. Instructors must be at least 21, hold a high school diploma or GED and a valid driver license, and have completed a Defensive Drivers Instructors School operated by AAA, the National Safety Council or another school the Department approves. The provider issues each student a completion certificate on a Department form showing the student's full name, driver license number, date of birth, course name, hours completed and the provider's name and address. Records must be kept for three years and made available to the Department.

Why the course matters to students

Adult drivers who reach twelve or more points in twelve months receive a notice of proposed suspension and may be required to complete an 8 hour defensive driving school within ninety days. Adults can receive that credit only once every five years. Drivers under 18 face action at six or more points. The Department publishes a list of approved 8 hour schools for these referrals.

How the premium is set

You do not pay $7,500. The surety quotes a yearly premium after reviewing the owner's personal credit and the business, and stronger credit earns a lower rate.

Eligibility and Requirements for a Tennessee Defensive Driving School ($7,500) Bond:

• Continuous surety bond in the principal sum of $7,500.
• Surety approved by the Department and authorized to do business in Tennessee.
• Thirty days' written notice to the Department before the bond can be cancelled.
• Liability insurance of $300,000, separate from the bond.
• An eight hour course taught by instructors trained through AAA, the National Safety Council or another Department approved school.

Tennessee Defensive Driving School ($7,500) Bond FAQs:

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