How does workers’ compensation insurance work in Tennessee?

I own a business in Tennessee and I am hiring more employees. I have to purchase workers' compensation insurance, and I'd like to understand more about it. How does workers' compensation insurance work in Tennessee? Why do I have to purchase it, and what does it cover? 


Accidents happen, even in the safest workplaces. Workers’ compensation insurance provides insurance coverage for work-related injuries and illnesses. It provides medical care and income protection coverage for the injured worker while they are unable to work. Workers’ compensation insurance also helps protect employers from lawsuits by injured employees. 

Every state has a different workers’ compensation program. The state determines the amount of benefits injured workers are entitled to, which impairments or injuries are covered, how those impairments will be evaluated, and how medical care will be delivered. States also dictate how much insurance will be provided by state-run agencies or by private insurance companies, as well as how claims, disputes, and cost-savings strategies should be handled. 

What are some situations where workers’ compensation helps both parties in Tennessee? 

A: Consider the following:

  • An over-the-road truck driver injured his back while making deliveries. After fusion surgery and rotator cuff surgery, he remained unable to return to work.
  • A construction worker fell in a hole at a worksite and fractured his leg. He was forced to retire due to permanent restrictions related to the injury.
  • A repetitive motion injury caused a butcher to need several surgeries on his arm. The injury resulted in permanent restrictions that made him unable to return to work.

Where Can I find Workers Compensation Insurance in Tennessee?

A: Workers’ compensation insurance in Tennessee can be purchased directly from one of the many insurance companies actively writing coverage in the state, or from an agent licensed to sell it in the state. All employers who are unable to find coverage from a private carrier are eligible to purchase workers’ compensation coverage from the state’s Assigned Risk Program. 

Do I need workers’ compensation insurance in Tennessee?

A: Workers’ compensation insurance is required by law in Tennessee. All employers in the construction or coal mining field, and all other employers who have at least five full- or part-time workers must cover their employees with workers' compensation insurance. 

It is not necessary to purchase coverage for sole proprietors, LLC members, corporate officers, or partners. However, you do have the option to do so if you wish. Corporate officers and family members who meet the definition of “employee” are included in the count towards the total, regardless of whether or not the officer(s) elects to decline coverage.

What If I Don't Purchase Workers Comp in Tennessee? 

A: Tennessee employers who do not provide workers’ compensation insurance as required may face fines and other penalties for non-compliance.

What does workers’ compensation insurance cover in Tennessee?

A: Tennessee workers’ compensation insurance provides medical benefits, disability benefits, and death benefits for workers who are injured or killed on the job. 

Medical Benefits

Workers’ compensation insurance in Tennessee ensures that an injured worker can receive appropriate medical treatments and follow-up care with no out-of-pocket costs to them. 

As an employer, you may designate authorized physicians that your workers may go to for their workers’ compensation medical care. An exception is made for severe injuries that require immediate attention. In that case, the cost of treatment at the nearest emergency room will be covered.

Workers’ compensation insurance in Tennessee will also reimburse your employees for their mileage if they must travel more than 15 miles one-way in order to receive care from an authorized physician or referred specialist.

Disability Benefits

If one of your employees needs more than seven consecutive days to recuperate from a work-related injury, workers’ compensation insurance can provide them with disability coverage (income replacement). Temporarily disabled employees can receive a weekly benefit of two-thirds their average weekly wage.

Sometimes, employees can return to work in a limited capacity. If a recuperating employee is earning less money than prior to being injured, either because the light-duty job pays less or they are working fewer hours, workers’ compensation insurance can compensate them with two-thirds the difference in income.

In the event that an employee is permanently disabled, Tennessee workers’ compensation insurance will pay out a lump-sum payment of up to 450 weeks of compensation based on the employee’s previous earnings and the severity of his impairment.

Death Benefits

Unfortunately, sometimes workers suffer fatal injuries on the job. Tennessee workers’ compensation insurance can help surviving family members manage the financial difficulties of this loss by providing them with compensation benefits.

Death benefits may be up to $10,000 in burial costs and a weekly payment to the surviving spouse that will range from 50 to 66 percent of the employee’s previously earned wages, depending on whether or not the deceased had dependent children. In the event that the fatally injured worker has no spouse or dependents, $20,000 will be awarded to his or her estate.

Author | Ann Herro

Article Reviewed by | Paul Martin

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