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Tennessee Workers’ Compensation insurance

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Is Workers’ Compensation insurance required in Tennessee?

If you employ five or more people in your business, the Tennessee Bureau of Workers’ compensation requires that you carry workers’ compensation insurance. However, if your business is in construction or a similar trade, you have to carry this coverage no matter how many employees you have.

Even if your business is not required to have compensation, you can benefit from the coverage it provides for medical expenses and lost wages.

Workplace injuries aren’t limited to active construction sites. Injuries such as falls, breaks and cuts can happen to an office worker, a boutique owner or more active professions, such as a personal trainer.

For example, a golf instructor who throws out her back during a session at a driving range could face an emergency trip to the hospital, physical therapy, medications and lost income while she recovers at home in bed. A workers’ comp policy could help cover her medical expenses and lost wages until she’s healthy enough to book new business again.

Who is exempt from Workers’ Compensation insurance in Tennessee?

Although many businesses must have workers’ comp insurance, some are eligible for a Tennessee workers’ compensation exemption, including sole proprietors, partners in a business and members of an LLC. 

However, without workers’ compensation, they would likely have to pay for medical coverage out of pocket if there is a workplace injury and they would get no reimbursement for lost wages.

The benefits of buying Tennessee Workers’ Comp insurance

If you purchase Tennessee workers’ compensation, you and your employees could receive financial help after a workplace injury for:

  • Emergency treatment
  • Medical bills
  • Lost wages
  • Death benefits

These benefits are significant because they help you and your workforce get back on their feet after an injury. Additionally, employees who accept workers’ compensation benefits typically can’t sue their employer to pay injury-related expenses.

But it’s not just about your staff. The ability to show proof of coverage could also improve your chances of sealing the deal with some clients. For example, many businesses limit their own liability for potential injury lawsuits by requiring all contractors to carry basic business insurance, including workers’ compensation.

Coverage might also be required for a professional license. For example, to meet the general contractor license requirements in Tennessee, contractors must have general liability and workers’ compensation insurance unless they can prove they are exempt.

Luckily, finding the right policy for your business can be fast and easy if you start a free online instant quote with Next Insurance.

How does Workers’ Compensation work in Tennessee?

To receive benefits, employees must file a workers’ compensation claim within one year of the injury — this is the Tennessee’s workers’ compensation statute of limitations.

There are two types of Tennessee workers’ compensation settlements: 

Medical benefits

Medical benefits include emergency care and follow-up appointments, physical therapy and other services related to the work injury. In Tennessee, there’s no maximum for medical benefits paid out as part of a workers’ comp claim.

Partial wage replacement

Partial wage replacement includes the following benefits:

 

Coverage Purpose Benefit rate Max benefit
Temporary disability Wages while an employee heals from injury 110% of usual wages $1,093/week 
Permanent disability Wages if employee can no longer work 100% of former wages $994/week 
Death benefit (burial) If an employee dies due to the incident N/A $10,000 total 

The table was created using data from tn.gov. Values apply to incidents that occur 7/1/2020 to 6/30/2021.

Temporary disability benefits

Temporary disability come in two types:

Temporary partial disability (TPB) occurs when the worker is placed on “light duty” or otherwise restricted work while healing.

Temporary total disability (TTD) occurs when the employee can’t work at all while healing.

Employees may be eligible for benefits in the following situations:

  • A doctor recommends the employee refrain from working temporarily.
  • A doctor temporarily limits the hours the employee works.
  • The employer reduces the employee’s wages due to a work-related injury.

Permanent disability benefits

Tennessee also breaks permanent workers’ compensation disability benefits into two types:

Permanent partial disability (PPD) occurs when the employee has a permanent disability but can still do some work.

Permanent total disability (PTD) occurs when the employee has a permanent disability that prevents them from working at all. A permanent disability designation generally occurs only after an employee is released from initial treatment.

Death benefits

In Tennessee, the family of a worker who dies due to an on-the-job injury could receive both burial expenses and wage replacement up to the workers’ comp policy limits.

Workers’ comp can cover up to $10,000 for burial expenses. Wage replacement benefits depend on who the employee’s surviving family is:

  • A surviving spouse with no dependent children could receive 50% of the worker’s average monthly wages.
  • A surviving spouse with one or more dependent children could receive two-thirds of the worker’s average monthly wages.
  • If the employee had no dependents, a lump sum of $20,000 will be paid to their estate.

What are the penalties of not having Workers’ Comp in Tennessee?

Employers who are not in compliance with Tennessee workers’ comp laws will be subject to a fine. How much you’ll pay depends on how much a policy would have cost, based on the state’s analysis of your risk. 

The penalty may also depend on how long you went without coverage and could be higher for certain industries, such as construction.

How much does Workers’ Comp cost in Tennessee?

The cost of a workers’ compensation insurance policy depends on several factors with your business operations:

  • Your industry and the type of work your employees do
  • How many employees you have
  • Your claims history (more injuries means higher costs)
  • Your location

To find out how much you could pay for workers’ comp coverage, start a free online instant quote.

Other business insurance policies to consider

Workers’ compensation is critical to protecting your employees and your business from expenses related to on-the-job injuries, but it’s not the only business insurance you may need.

 

General Liability insurance

General liability insurance protects your company from common mistakes or accidents, such as customer injury or property damages.

 

Professional Liability insurance (a.k.a. E&O insurance)

Also called errors and omissions insurance, professional liability insurance covers businesses in case of professional mistakes and accusations of negligence.

 

Commercial Auto insurance

Commercial auto insurance covers your business in case of accidents, injuries, or property damage while driving for business purposes.

 

How Next Insurance helps Tennessee businesses find the right Workers’ Comp coverage

Next Insurance offers a painless, seamless process for getting workers’ comp and other insurance for your small business. Most entrepreneurs can complete the process in just 10 minutes. If you have questions, our team of licensed, U.S.-based Next Insurance advisors are available to help.

Start an instant workers’ comp quote online today.

FAQ

How do I get a Certificate of Insurance?
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We provide you unlimited certificates of insurance, free of charge. Once you've purchased a policy, log in to our website to get proof of insurance or add an Additional Insured. In most cases, you'll get your certificate within minutes. Otherwise, we'll email it within one business day.
Can I add to or change my coverage?
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If you’ve expanded your business and need coverage for more kinds of work, please let us know! An agent will go over your new operations and next steps with you and in most cases, we’ll be able to set you up with a new policy on the same day (so there will be no gaps in your coverage). Unfortunately though, we can’t remove any exclusions from the policy. So if you see your operations listed in our exclusions section, we’re very sorry, but our policy isn’t going to be the right fit for you just yet.
How does Live Certificate work?
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When you login to your account at the Next Insurance website, you’ll see an option to “Share Proof”. Clicking that will give you an option to either put in an email address and have us send your certificate, or copy a link which you can send to anyone you like that will take them to your Live Certificate.
How long will it take to get my policy after I buy?
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You will be receive your policy documents via email within one business day of purchase.
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