Quick guide: Workers’ compensation in Tennessee

Your small business work comp questions answered


You’ve got a business to run so we’ll tell you what you need to know about workers’ compensation in Tennessee — what it is, who needs it, and where you can buy it.

What is workers’ comp?

Workers’ compensation insurance was created to pay for medical costs and lost wages if employees are injured at work. Benefits can also include payments to compensate for permanent disabilities and to dependents of workers who are killed in job-related incidents. It protects employees from the costs of work injuries and protects employers from lawsuits.

What does workers' compensation insurance cover?

Unlike other lines of insurance, workers’ compensation doesn’t offer different or optional levels of coverage for you to choose. When your policy is in place, it covers every work-related injury considered compensable by Tennessee state law. Workers’ comp benefits are spelled out by state law and don’t vary from policy to policy within the state.

How do I know if I need workers' comp insurance?

In general, Tennessee law requires employers with five or more employees to provide workers’ compensation coverage. Some industries have more stringent requirements. Construction business/trades and coal mining are required to provide coverage for as few as one employee.

There are a few exceptions, which are listed in the next question.

Are there any exceptions?

According to the Tennessee Department of Labor & Workforce Development, there are a few exceptions in Tennessee workers’ compensation law:

  • State and local governments and those employing farm laborers or domestic help
  • Sole proprietors, partners and members limited liability companies (LLCs) aren’t included in the count of employees
  • Corporate officers can exempt themselves but are not excluded from the count of employees unless they are not compensated
  • Family members, if the applicant and members of the same family hold at least 95% ownership of the business

How much will it cost?

Your workers’ compensation premium is based on how much your payroll is, how dangerous your industry is, and your business’s history of work injuries. If you have a clean safety record, it can help keep your premium low.

For more on how premium is calculated, see our Workers’ Comp 101 page.

Where do I buy workers’ comp insurance?

You have a couple options: you can use an independent insurance agent (find an agent in your area using the tool on our SFM website) or buy it directly from an insurance carrier like us. To get your workers’ comp coverage directly through SFM, request a quote online or call us at (844) 828-3801.

Where can I get more information on workers’ compensation in Tennessee?

Since workers’ comp coverage is mandated by the state, the Tennessee Department of Labor & Workforce Development is your go-to source of information.

For safety requirements and information, check out the Tennessee Occupational Safety and Health Administration (TOSHA).

How do I know if I need workers' comp insurance?

Find more questions and answers on our Workers’ Comp 101 page, or contact us!

Ready to get started?