(800) 253-1482Small Business Insurance in Tennessee
Summary: Small businesses power Tennessee’s economy, however, risks like injuries, property damage, and lawsuits can be costly without the right protection. Business insurance provides essential financial protection, covering personal injury claims, professional negligence, and business-related accidents. A single incident—like a customer slip-and-fall or employee injury—can cause major financial strain. Fortunately, business insurance safeguards your company, ensuring stability and growth despite unexpected challenges. Estimated Read Time: 10 mins
Small businesses drive Tennessee’s economy, employing over half of the private-sector workforce. The Volunteer State thrives on entrepreneurship with more than 142,000 small businesses and nearly half a million solo entrepreneurs calling it home. However, risks like injuries, property damage, and lawsuits can be costly for any venture, making protection important for commercial enterprises. Business insurance in Tennessee helps protect against financial losses, keeping your company secure and moving forward.
Types of Small Business Insurance in Tennessee
Just like your company faces multiple perils, different types of small business insurance in Tennessee are available to better protect your company, tailored to meet your needs.
Here’s a breakdown of some of the more common types of coverage business owners rely on and how they can protect your enterprise:
General Liability Insurance
General liability insurance in Tennessee protects businesses from common accidents and legal claims.
Your policy covers medical costs if a non-employee gets injured on your property and pays for accidental damage to others’ property.
This coverage also helps with legal fees for claims like libel, slander, false advertising, or copyright infringement, offering essential financial protection.
Workers’ Compensation Insurance
Tennessee law requires certain employers to provide workers’ compensation insurance, ensuring injured workers receive medical and wage benefits while promoting fair business competition.
Construction employers with one or more employees must have coverage unless exempt, and business owners must carry coverage or be on the Exemption Registry.
Coal mining employers need coverage if they have at least one employee. Other businesses must provide coverage if they have five or more employees, including family members, part-time workers, and corporate officers.
Employers can obtain insurance through a carrier or qualify as self-insured. If unable to find an insurer, they can contact NCCI for help.
Exempt employers can opt-in by filing Form I-8 and withdrawing with Form I-9.
Businesses dropping below five employees may discontinue coverage by filing Form I-3, but they remain subject to requirements until approved.
Corporate officers in non-construction businesses can exclude themselves by filing Form I-6. Sole proprietors and partners can opt-in with Form I-4, while those in construction are automatically covered unless listed as exempt.
Subcontractors must provide coverage for their employees but they can be covered under a general contractor’s policy by filing Form I-15.
Otherwise, they must maintain their own insurance and provide proof. Employees of subcontractors cannot waive their right to coverage.
Commercial Auto Insurance
If your business owns vehicles in Tennessee, you’re required to have commercial auto insurance.
The minimum coverage is the same as personal policies: $25,000 for bodily injury per person, $50,000 per accident, and $15,000 for property damage.
Your insurance costs depend on a few factors. Heavy trucks and vehicles carrying hazardous materials need higher coverage limits.
Location matters too—areas with more claims or expensive settlements tend to have higher rates. Additionally, if your business covers a large travel radius, expect to pay higher premiums.
Skipping insurance isn’t worth the risk as owners can face hefty fines, expensive lawsuits if they cause an accident, and even suspension of their plates or registration.
Many commercial auto insurance companies recommend higher limits based on how you use your vehicles to keep you protected against the specific risks your enterprise might face.
Beyond meeting legal requirements, commercial auto insurance protects your business—it helps cover accident costs, legal fees, and even theft, keeping you financially secure when the unexpected happens.
Business Owners Policy (BOP)
A Business Owner’s Policy (BOP) bundles property and liability insurance to protect small businesses from risks like fire, theft, and lawsuits.
Policies include coverage for business property, general liability, and lost income.
Optional add-ons like cyber liability, workers’ compensation, and commercial auto enhance protection, ensuring financial security and peace of mind.
Small business insurance in TN should meet your specific needs. BOPs help owners cover against multiple threats at once.
Commercial Property Insurance
Tennessee commercial property insurance helps cover business property damaged by events like fire, water, or wind.
For example, if a kitchen fire damages equipment in a restaurant, this coverage can help with repairs.
However, policies may exclude certain risks, like flooding, so reviewing your coverage details is essential.
Professional Liability Insurance (Errors and Omissions)
Professional liability insurance in Tennessee, also known as errors and omissions (E&O) insurance, protects businesses from claims of negligence, mistakes, or failure to deliver services.
These policies cover legal costs, settlements, and damages related to breaches of contract, negligence, fraud, and more.
Keep in mind your coverage must be active when a lawsuit is filed in most cases, meaning business owners need to have protection in place ahead of time and stay up to date on paying their premiums.
Even if not required, E&O insurance is a smart investment to safeguard your business from costly claims.
Cyber Insurance
Cyber insurance helps protect your business from costly data breaches involving sensitive customer information like Social Security and credit card numbers.
It covers legal fees, customer notifications, identity restoration, data recovery, and system repairs.
Since general liability insurance doesn’t cover cyber threats, having a cyber policy ensures you’re prepared.
Additionally, Tennessee law requires businesses to notify customers no later than 45 days after discovering a data breach, which can be expensive without coverage.
Investing in cyber insurance safeguards your company’s finances and reputation.
Business Umbrella Insurance
When you own a business, insurance provides you with extra protection when a claim exceeds the limits of your existing policies.
If a major accident or lawsuit leads to high costs—like medical bills, legal fees, or property damage—your policy covers the remaining expenses, keeping your business financially secure.
Without umbrella insurance, a large claim could leave your business paying out of pocket, which can be a huge financial burden.
For example, if a customer is injured at your business and medical expenses go beyond your general liability coverage, your umbrella policy steps in to cover the rest. It also helps with lawsuits, ensuring legal costs don’t drain your resources.
This type of insurance is especially useful for businesses with high risks, such as those with employees, heavy equipment, or frequent customer interactions.
Your policy provides a financial safety net so you can focus on growing your business without constant worry about unexpected claims.
By adding umbrella insurance, you strengthen your company’s protection and avoid costly setbacks.
It’s a smart way to safeguard your business, ensuring that even if the unexpected happens, you have the coverage needed to keep moving forward.
Commercial Flood Insurance
Commercial flood insurance safeguards your business from flood damage, covering both the building and its contents.
Since standard commercial property insurance doesn't include flood coverage, businesses must purchase a policy to protect against this risk.
Keep in mind that while owners can purchase coverage through the National Flood Insurance Program (NFIP), you may find better coverage, lower premiums, or both, using private insurers.
Just like other policies, when protecting your venture from floods, it's always important to shop around and compare.
What Is the Average Cost of Small Business Insurance in Tennessee?
Business insurance costs in Tennessee vary based on factors like location, size, and coverage needs.
For example, businesses in Nashville may pay different rates than those in Chattanooga.
Furthermore, while businesses with employees often face higher premiums, the most significant factor is the industry, with high-risk ventures, such as roofing or tree trimming, requiring more expensive specialized coverage.
If you’re looking to save on coverage, it’s important to compare your options to not only avoid overpaying but to ensure your hard work is properly protected.
Get a free business insurance quote from top-rated carriers near you to meet your company’s specific needs. Simply click the link or fill out the form below to begin saving:
Factors Affecting the Cost of Small Business Insurance in Tennessee
In Tennessee, several factors affect how much small business insurance costs. One of the biggest factors is the type of work your business does.
If you're in a high-risk job like construction or tree trimming, you’ll probably pay higher premiums because these industries have more accidents and injuries.
On the other hand, if you're in a lower-risk field like financial advising, your premiums might be lower, but you’ll still need insurance.
Another important factor is how many employees you have. If your business has workers, you’ll likely need workers’ compensation insurance, which increases your premiums.
The more employees you have, the higher the risk for claims, and this can make your rates go up.
Furthermore, the amount of coverage you choose also affects your insurance costs, and aggregate limits—how much the insurance company will pay out in total—also play a role.
Other factors that can affect your rates include the value of your property and equipment, where your business is located, how long your business has been around, and whether you have a history of claims.
If your assets are valuable, or your business is in an area with high insurance costs, your rates may also be higher.
Ways For to Save on TN Business Insurance
Saving on business insurance in Tennessee is easier than it seems. Start by comparing quotes from different providers, as prices and policies vary. Bundling policies can also lead to discounts.
Raising your deductible can lower premiums, but make sure you can afford the higher cost if a claim is filed.
Regularly review coverage limits to avoid overpaying and improve your business’s risk profile (e.g., upgrade security or safety programs) to lower premiums.
Maintain a clean claims history, as fewer claims typically result in lower costs. If your payroll changes, consider a payroll-based workers' compensation policy for savings.
Finally, ask commercial insurance agencies about discounts for industry memberships or paying your premium annually, and continually assess your insurance needs to keep costs down.
Tennessee Business Insurance Requirements
Simply put, the requirements of commercial coverage aren't so simple in Tennessee.
The Volunteer State requires businesses to have insurance in place but your industry plays a significant role in determining which coverages are required.
Different types of businesses may need specific insurance coverage, bonds, or licenses to operate legally.
For instance, contractors often need general liability insurance or surety bonds to meet state licensing regulations.
Real estate agents and brokers must carry errors and omissions insurance policies, and other professionals offering advice or services may need similar coverage to maintain their licenses as dictated by state law.
Furthermore, cities and counties operate with their own regulations complicating matters even further.
This is why working with a team of experts is important, and why our team is proud to be a resource for your coverage needs.
To learn more about insurance resource information for licensees and the coverage you need, contact our agents at the number above, or click to use the Tennessee government’s official online guide.
Who Benefits From Tennessee Business Insurance?
Running a small business in Tennessee involves risks, but the right insurance can protect your livelihood.
Freedom Insurance Group is proud to offer commercial auto and business liability insurance for various industries.
If you're in automotive services, arts and entertainment, or food service, your coverage can cover accidents, property damage, and liability claims.
Skilled trades like electricians and plumbers can also benefit from policies offering protection for property damage, workplace injuries, and equipment loss.
Tennessee Small Business Insurance Resources
Finding expert advice, capital, or help with the little things can be a pain for many ventures, however, TN offers plenty of great resources for owners no matter their needs:
- The Tennessee state government offers ample resources for owners of businesses small, large, and everything in between. From getting a license to understanding commercial real estate, TN provides you with the tools you need to succeed.
- Through the Tennessee Small Business Development Center (TSBDC), training, funding resources, help with business plans, guidance, and more are all available.
- Fund Tennessee is where entrepreneurs can find capital and investors for their small businesses.
Finally, no matter your industry or needs, contact our agents to find business insurance that protects your enterprise for less.
