Tennessee Contractor Insurance Requirements

General Liability Insurance Minimums

Tennessee ties your required general liability coverage directly to the monetary limit on your contractor license. The higher the project values you want to bid on, the more coverage you need:

Your Certificate of Insurance must list the Tennessee Board for Licensing Contractors as the certificate holder. The legal entity name on the certificate must match your Secretary of State registration and your CORE application exactly — a name discrepancy will hold up your application.

If you are an out-of-state contractor establishing a Tennessee presence, confirm that your insurance documents meet the Board's Tennessee requirements. For workers' compensation, the policy must explicitly list Tennessee under Section 3A, as described below.

Workers' Compensation Coverage

All construction employers in Tennessee must carry workers' compensation insurance covering every employee, starting from employee number one. The state classifies all contractors as Construction Services Providers, which means there is no small-employer exemption available to construction firms.

Your workers' comp certificate needs to be on file at your primary office and at every active job site. General contractors must also keep physical copies of the Certificates of Insurance for all active subcontractors on site — not just digital copies.

Out-of-State Contractor Insurance Trap

If you hold a workers' comp policy from another state, it must explicitly list Tennessee under Section 3A of the policy. The Board does not accept policies that list Tennessee only in Section 3C (the "other states" catchall). If you do not have a physical Tennessee address, you will likely need a separate Tennessee-specific workers' compensation policy.

This is one of the most common insurance-related delays for out-of-state applicants. Verify the 3A listing with your insurance carrier before submitting your application through CORE.

Owner Exemptions From Workers' Comp

Not every contractor needs to carry workers' comp coverage on themselves. Tennessee allows certain owners and officers to exempt themselves from the coverage requirement through the Workers' Compensation Exemption Registry:

• Corporate officers can exempt themselves from coverage
• LLC members with at least a 20% ownership stake qualify
• Partners with at least a 20% ownership stake qualify
• If family members collectively hold at least 95% of the business, they may also qualify for exemption

The exemption filing fee is $50 if you hold an active state contractor license, or $100 if you are unlicensed at the time of filing. Up to five individuals within a single corporation, LLC, or partnership can claim the exemption. Sole proprietors are limited to one exemption.

The exemption applies only to coverage on the exempt individuals themselves. If you hire any employees — even one — they must be covered by a workers' compensation policy. No exceptions.

For a detailed walkthrough of the exemption process, see our Tennessee workers' comp exemption registry guide.

How Insurance Connects to Your Application

Your insurance certificates are uploaded through the CORE portal along with the rest of your application documents. Include GL and workers' comp documentation (or exemption proof) with the application so the file is complete for Board review.

Required coverage must remain active and current throughout the life of your license. If coverage lapses, the license cannot be renewed without proof of the required coverage, and you cannot legally bid or contract without an active license.

At renewal time (every two years), you will need to submit updated certificates through CORE. Setting your insurance renewal dates to align with your license renewal cycle saves administrative headaches later.

The Tennessee General Contractor License Guide includes an insurance checklist that maps each coverage requirement to the corresponding application step, so you can coordinate with your insurance agent efficiently.

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