Do I need workers compensation insurance?

Workers Compensation Insurance Requirements in Tennessee

In Tennessee, whether you need workers compensation insurance depends on the size and type of your business.

When Workers Compensation Insurance Is Required

• Businesses with five or more employees: If your business has five or more employees, you are generally required to carry workers compensation insurance.
• Construction industry: Businesses in the construction sector must have workers compensation insurance if they have one or more employees.
• Non-construction businesses: For most other industries, the threshold is five or more employees.

Operational Considerations

• Employee classification: Properly classify your workers as employees or independent contractors to determine coverage needs.
• Insurance procurement: Obtain coverage through private insurers or the Tennessee Workers’ Compensation Insurance Plan if you have difficulty securing insurance.
• Compliance and penalties: Maintain active coverage to avoid fines, stop-work orders, or legal claims.
• Recordkeeping: Keep accurate payroll and injury records to support claims and reporting requirements.

As of 2026

Review your employee count regularly, especially if you are near the threshold, to ensure compliance with Tennessee’s workers compensation insurance laws.