A Tennessee residential contractor must maintain what minimum amount of general liability insurance?
Correct Answer
D) $300,000
Tennessee requires residential contractors to maintain minimum general liability insurance of $300,000.
Why This Is the Correct Answer
Tennessee law requires residential contractors to carry a minimum of $300,000 in general liability insurance coverage. This requirement protects homeowners and the public from contractor negligence, property damage, or bodily injury arising from construction activities.
Why the Other Options Are Wrong
Option A: $50,000
$50,000 is far below the statutory minimum. This amount would be wholly inadequate for residential construction projects and does not satisfy Tennessee's licensing insurance requirement.
Option B: $100,000
$100,000 is also below the required minimum. While this figure might seem substantial, Tennessee's $300,000 requirement reflects the real-world exposure associated with residential construction projects.
Option C: No insurance requirement
'No insurance requirement' is incorrect. Tennessee explicitly mandates minimum general liability insurance as a condition of contractor licensing. Operating without required insurance is grounds for license denial or revocation.
Memory Technique
Associate $300,000 with '3' — Tennessee's favorite number for contractor regulation: $3,000 exemption threshold, 30% down payment cap, $300,000 insurance minimum. The '3 pattern' links these key Tennessee contractor numbers.
More Tennessee Questions
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Under Tennessee lien law, what is the maximum time limit to enforce a mechanics lien after it has been filed?
Under Tennessee lien law, which party has priority when multiple liens are filed against the same property?
Under Tennessee building codes, what is the maximum allowable deflection for a residential floor joist with a 16-foot span under live load?
A homeowner in Nashville hires an unlicensed contractor for $8,000 worth of electrical work. The contractor demands payment but the work fails inspection. Under TCA 62-6, what recourse does the unlicensed contractor have?
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A Tennessee contractor has 8 employees working on a residential project. The total weekly payroll is $6,400. If the workers' compensation rate for residential construction is $8.50 per $100 of payroll, what is the weekly workers' compensation premium?
A contractor is installing a septic system for a new home in rural Tennessee. The estimated cost is $8,500. According to TCA 62-6, what licensing requirement applies?
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