Do I need business insurance to start?

Business Insurance Requirements for Starting a Business in Tennessee

In Tennessee, business insurance is not universally required to start a business, but certain types of insurance are mandatory depending on your business activities and structure.

Mandatory Insurance Types

• Workers' Compensation Insurance: If your business has five or more employees, you must carry workers' compensation insurance. This covers medical expenses and lost wages if an employee is injured on the job.
• Unemployment Insurance: Employers must register for unemployment insurance through the Tennessee Department of Labor and Workforce Development and pay applicable payroll taxes.
• Commercial Auto Insurance: If your business uses vehicles, you are required to have commercial auto insurance that meets Tennessee’s minimum liability coverage.

Recommended Business Insurance

While not required by law, consider the following insurance types to protect your business operations:

• General Liability Insurance: Protects your business from claims related to bodily injury, property damage, and advertising injuries.
• Professional Liability Insurance: Important for service-based businesses to cover claims of negligence or errors.
• Commercial Property Insurance: Covers damage to your business property from fire, theft, or natural disasters.
• Business Interruption Insurance: Helps cover lost income if your business operations are halted due to a covered event.

Operational Considerations

Before launching, evaluate your business risks and consult with a licensed insurance agent familiar with Tennessee’s business environment. Incorporate insurance costs into your budgeting and bookkeeping processes. Proper insurance coverage supports compliance and can be critical for securing business licenses or contracts.

As of 2026, insurance requirements and regulations may change, so regularly review updates from the Tennessee Department of Commerce and Insurance and other relevant state agencies.