Small Business Insurance in Tennessee

Workers’ compensation can help cover medical bills, rehabilitation, and time away from work if an employee is injured on the job. In Tennessee, most small businesses are typically required to carry workers’ comp once they regularly employ five or more people, including full-time, part-time, and family members on the payroll.

However, if your business operates in the construction industry, state law mandates that you carry coverage from day one, as business owners themselves must be covered unless formally exempted.

One detail that trips up many small businesses: if you hire subcontractors who don’t carry their own workers’ comp coverage, you can be held responsible for their claims. That’s why it’s a good idea to request a Certificate of Insurance proving coverage before anyone sets foot on your job site. You can typically verify a subcontractor’s workers’ comp coverage status directly via the official Tennessee Workers’ Compensation Exemption Registry.

General liability insurance helps protect your small business against third-party claims, such as property damage and bodily injury.

With the exception of licensed contractors, Tennessee state law generally doesn’t mandate general liability for most businesses, but that doesn’t necessarily make it optional in practice. For example, proof of general liability is required for contractors seeking a license from the Tennessee Board for Licensing Contractors. Many Tennessee cities and counties may also require proof of coverage before issuing a local permit. And landlords and clients often request it before signing a lease or contract.

A BOP typically bundles general liability, commercial property protection, and business interruption coverage to help pay for damages, repairs, and lost income so you can get back to work quickly.

Many small businesses choose a BOP because it offers more protection than a stand-alone general liability policy without costing much more — a great option if you’re established or planning to grow.

Tennessee generally doesn’t mandate a BOP, but for local shops and restaurants, bundling property and liability is often the most cost-effective way to secure essential commercial property coverage against state-specific threats like nocturnal tornadoes.

Professional liability insurance, also known as errors and omissions (E&O) coverage, helps protect you from claims of negligence, missed deadlines, errors, or omissions in the work you deliver. It can also help cover legal defense costs, settlements, and judgments if a client files a formal legal claim against you.

Tennessee generally doesn’t require E&O depending on your business type, but it may be a smart choice for anyone paid for their advice or expertise such as accountants, real estate agents, marketing consultants, and IT firms. Many local client contracts won’t move forward without proof of this coverage and it can serve as an essential safety net, especially since a single claim of faulty work may cost far more than years of premiums.

Any vehicle your business owns and registers in Tennessee must carry liability coverage. To comply with the state’s Financial Responsibility Law, a Tennessee commercial auto policy must meet or exceed the mandatory minimum liability limits of $25,000 per person for bodily injury, $50,000 for all persons injured in a single accident, and $25,000 for property damage.

You can review guidelines and compliance rules directly via the official Tennessee Department of Revenue Financial Responsibility Law Portal or look up general commercial policies through the Tennessee Department of Commerce and Insurance.

As of the date of this article, Simply Business doesn’t offer commercial auto insurance in Tennessee, but our licensed insurance agents can help you find trusted providers that do.