Do I need workers compensation insurance?

Workers Compensation Insurance Requirements in Tennessee

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

When Workers Compensation Insurance Is Required

• Businesses with 5 or More Employees: Most private employers with five or more employees must carry workers compensation insurance. This includes full-time, part-time, and temporary workers.
• Construction Industry: If you operate in construction, the threshold lowers to having just one or more employees, meaning you must have coverage regardless of size.
• Public Employers: State and local government employers are generally required to provide workers compensation coverage for their employees.

When Workers Compensation Insurance May Not Be Required

• Businesses with fewer than five employees in non-construction industries typically are not mandated to carry workers compensation insurance, though it is often recommended.
• Some agricultural and domestic workers may be exempt depending on specific conditions.

Operational Considerations

• Employee Classification: Properly classify workers as employees or independent contractors to determine insurance obligations accurately.
• Insurance Providers: Tennessee allows businesses to purchase workers compensation insurance from private insurers or through the Tennessee Workers’ Compensation Insurance Plan.
• Recordkeeping and Reporting: Maintain accurate payroll and injury records to comply with state reporting requirements and facilitate claims processing.
• Compliance and Penalties: Operating without required coverage can lead to fines, stop-work orders, and liability for medical costs and lost wages.

As of 2026, confirm your specific obligations with the Tennessee Department of Labor and Workforce Development to ensure compliance with current rules and to explore available insurance options.