Who is Covered Under Workers’ Comp?

Let’s talk about workers’ compensation insurance—who has to have it, and who doesn’t? Here are the basics.

Who Counts as an Employee?

If you are in the state of Tennessee and you have 5 or more employees, you need to carry workers’ comp. That’s the general, baseline rule. What is an employee? The state of Tennessee does not define employee, so “employee” could include both part-time employees and full-time employees.

If you have a corporation, officers of the corporation actually count toward the number of employees. So, if there are two officers of your corporation and three employees, you need to carry workers’ compensation. If you are an LLC, partnership, or sole proprietorship, the owners do not count toward the number of employees. That means that if you have an LLC of five people but only one employee, you do not have to carry workers’ comp in Tennessee.

Exclusions and Inclusions

If you are in the construction industry and you work, you must carry workers’ comp. However, you can get a workers’ comp exemption on yourself so that you work by yourself with no other employees. If you get an exemption, you don’t have to carry workers’ comp. There are some caveats, however, so contact our Johnson City office if you have any questions.

Do you have to cover yourself if you own your company? The answer is no—you can actually make that decision.

Workers comp will cover you or your employees’ lost wages, medical bills at 100%, and will give a death benefit. The lost wages are governed by Tennessee regulations, and will basically be two-thirds of your average weekly wage for the last 52 weeks. There are some maximums for high income individuals, however, so you could possibly have a cap on that. You might also receive a lump sum disability settlement once you reach maximum medical improvement. The death benefit is set by the state.

If you have life insurance to cover your death, disability insurance to cover your lost income, and health insurance to cover your medical bills, then you really don’t need to be covered under workers’ comp if you own your company. In that instance, you can get excluded. If you are non-construction and incorporated, the owners are automatically included in workers’ comp unless they choose to be excluded.

Normally, if you are an LLC, sole proprietor, or partnership, you are automatically excluded: you don’t have coverage unless you sign a form to be put into workers’ comp. However, if you are a sole proprietor, partner, or LLC member of a construction company, you are automatically included unless you exclude yourself with a special form through the Tennessee Secretary of State’s office.


As a review: in Tennessee, officers of corporations are automatically covered, and sole proprietors, partners, or LLC members are excluded automatically unless they have a construction industry class code.

The non-construction officer inclusion or exclusion forms should be sent to the insurance company, while, if you are in construction, you fill out a form with the Secretary of State’s office and pay a fee in order to be excluded.

If you have questions about who is included or excluded under your workers’ comp, please call our Tri-Cities office at (423) 292-4142! We will help walk you through the process and make sure you have the best coverage for your needs.

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