$20,000 Tennessee Collection Service License Bond

Businesses are required to file a $20,000.00 bond with the State of Tennessee Collection Service Board (the "Obligee") to activate their license. The bond protects the Obligee by transferring to a surety bond company the cost of ensuring the public is compensated for damages resulting from a licensed business breaking licensing laws.

Collection Service License Bond

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How much does the Tennessee Collection Service License bond cost?

Tennessee Collection Service License bonds typically cost between $150 and $1,000 depending on the personal credit, license history, and experience of the business owners and the surety carrier issuing the bond.

Credit Premium Rate Bond Cost
0.75% $150
1.00% $200
1.25% $250
1.50% $300
4.00% $800
5.00% $1000

Is a Credit Check Required for Tennessee Collection Service License Bonds?

Surety carriers will run a credit report as part of underwriting the bond because the business ultimately must reimburse the surety bond company for any claims made on the bond.

Why is the Tennessee Collection Service License bond required?

Businesses are required to purchase and file a $20,000 bond with the State of Tennessee Collection Service Board to activate their license. The bond protects the Obligee by transferring to a surety bond company the cost of ensuring the public is compensated for damages resulting from the failure of a licensed business complying with the provisions of licensing laws.

How does the Tennessee Collection Service License bond work?

Tennessee Collection Service License bonds must be issued by an insurance carrier admitted by the Tennessee Department of Insurance. The insurance company issuing any surety bond, such as the Tennessee Collection Service License bond, will also be referred to as the "surety company" or the "bond company". The business is referred to as the Principal, the surety bond company as the Obligor and the State of Tennessee Collection Service Board as the Obligee.

The surety company provides the Obligee a guarantee (the surety bond) that the customers, vendors and employees of a licensed business will receive payment for financial damages due to a violation of licensing law up the bond amount stated on the bond form ("penal sum"). The bond company also directly receives claims from the public and determines the validity of claims. Ultimately, the licensed business owners are responsible for their actions and required by law to reimburse the surety company for any payments made under the bond or face indefinite license suspension.