Tennessee treats construction differently from almost every other kind of small business when it comes to workers' compensation. The Tennessee Bureau of Workers' Compensation says businesses engaged in the construction industry are generally required to have coverage for everyone, including the business owners, while other businesses need insurance if there are five or more employees. The state's Workers' Compensation Exemption Registry is the one way a qualifying construction owner can take himself or herself off that requirement. It never removes the requirement to cover employees.
| Item | What the Bureau says |
|---|---|
| Who must carry | Construction: generally everyone, including owners. Other businesses: five or more employees |
| What the exemption does | Lets a qualifying owner exempt only himself or herself |
| Employees | Must still be covered, even if there is only one employee |
| Who qualifies | 100% sole proprietor; corporate officer; LLC member with at least 20%; partner with at least 20%; or family ownership of at least 95% |
| How many | Up to 5 exempt individuals per entity; 1 for a sole proprietor |
| Fee | $50 with an active contractor's license; $100 without, which includes Construction Services Provider registration |
| Term | Valid for two years; renewal opens 60 days before expiration |
Source: Tennessee Bureau of Workers' Compensation, Who Must Carry Insurance, Exemptions, Exemption Registry, and Exemption Registry Forms and FAQs.
What the exemption covers, and what it does not
The Bureau describes the registry as a mechanism for legitimate business owners in the construction industry, called construction service providers, to exempt themselves from carrying workers' compensation coverage on themselves. Employees are not eligible, only employers with an ownership stake in the company. The Bureau is direct about the limit: exempt employers are still required to cover all of their employees, even if they have only one employee.
A business entity cannot apply for an exemption. The Bureau's FAQ says registration is only available to individual business owners engaged in the construction services industry. The law behind it is in Tennessee Code Annotated Title 50, Chapter 6, Part 9.
Who qualifies
- A sole proprietor who owns 100% of the assets of the business
- An officer of a corporation
- A member of a limited liability company with at least a 20% ownership interest
- A partner with at least a 20% ownership interest
- An applicant who, together with members of the same family, holds at least 95% ownership of the business
Since October 1, 2011, each corporation, LLC, limited liability partnership, limited partnership, general partnership, and family-owned business may have up to five individuals who qualify. A sole proprietor can have only one exemption. Every business entity through which someone seeks an exemption, including a sole proprietorship, must have a federal employer identification number (FEIN).
Fees, forms, and renewal
The initial application is form LB-4523, filed with the fee by e-file, print and mail, paper submission, or walk-in. For applicants with an active contractor's license from the Board for Licensing Contractors, the initial fee is $50. Without an active contractor's license, the fee is $100, which includes the Construction Services Provider registration.
Exemptions are valid for two years. The Bureau says owners can renew starting 60 days before expiration, and a notice with renewal instructions is sent within 60 days of the expiration date. Put the date on your calendar; a lapse means the owner is back under the general construction rule.
How the registry affects general contractors and homeowners
The registry is a publicly accessible list of those granted the exemption, and the Bureau notes that a listing in no way reflects the validity of a person's license or certification status. A general contractor hiring a subcontractor should treat an exemption as covering only the listed owner, and still confirm coverage for any crew. TDCI's guidance on checking coverage is in TDCI’s workers’ comp page says verify coverage online — a certificate may not warn you of cancellation. If a hurt worker's employer had no required coverage, see Tennessee’s Uninsured Employers Fund caps benefits at $40,000 for workers hurt on the job without coverage.
Non-construction owners and the employee count
Outside construction, the Bureau says sole proprietors, partners, and LLC members are excluded from the count of employees that decides whether an employer is covered. Corporate officers can exempt themselves from a policy but are counted unless they are not paid or compensated. If an employer is not required to carry coverage and an employee is hurt at work, the injured worker is not entitled to workers' compensation benefits but is not barred from filing a lawsuit against the employer. For how to buy a policy, including the residual market, see TDCI explains how Tennessee employers buy workers’ comp and reach the residual market. Current benefit levels are in Tennessee raised its workers’ comp weekly benefit caps for injuries on or after July 1, 2026.
Registry questions can go to the Bureau at 615-532-1319 or [email protected].
This article is informational only and is not legal advice. It does not promise coverage, eligibility, or a particular result. Tennessee law and the Bureau's rules control.
Related reading from All Seasons
- TDCI’s workers’ comp page says verify coverage online — a certificate may not warn you of cancellation.
- TDCI explains how Tennessee employers buy workers’ comp and reach the residual market.
- Tennessee’s Uninsured Employers Fund caps benefits at $40,000 for workers hurt on the job without coverage.
- Tennessee raised its workers’ comp weekly benefit caps for injuries on or after July 1, 2026.
Free policy review
All Seasons Insurance Group offers a free personal policy review. Call 865-263-1400 or visit asigtn.com/get-a-quote/. This article is informational only and does not promise coverage or eligibility; your policy forms control. Seasons change. So should your coverage.
Do Tennessee construction business owners have to carry workers' comp on themselves?
The Bureau says construction businesses are generally required to cover everyone, including owners, unless a qualifying owner registers an exemption through the Exemption Registry.
Does the exemption cover my employees?
No. Exempt employers are still required to cover all of their employees, even if they have only one employee.
Who can register for a construction exemption in Tennessee?
A 100% sole proprietor, a corporate officer, an LLC member or partner with at least 20% ownership, or an applicant whose family holds at least 95% ownership.
Can my company register instead of me?
No. The Bureau says registration is only available to individual business owners engaged in the construction services industry, not business entities.
How much does the exemption cost?
$50 for applicants with an active contractor's license, or $100 without one, which includes Construction Services Provider registration.
How long does an exemption last?
Exemptions are valid for two years. Renewal opens 60 days before expiration.
Does being on the registry mean a contractor is licensed?
No. The Bureau says a registry listing in no way reflects the validity of a person's license or certification status.
How can All Seasons help after reading this?
Call 865-263-1400 or visit asigtn.com/get-a-quote/ for a free personal policy review. Informational only; no coverage promises. Seasons change. So should your coverage.
