Tennessee Department of Commerce and Insurance Commissioner Carter Lawrence signed orders on Dec. 23, 2025 approving a 2.0% overall loss cost decrease for the voluntary workers compensation market and a 1.1% decrease in the assigned risk rate level, effective March 1, 2026 on new and renewal policies. It is the 13th consecutive year Tennessee workers compensation costs have declined - and, per state filings, the smallest decrease in several years.
The filing was submitted by NCCI on Sept. 24, 2025 and is built on policy year 2022 and 2023 premium and loss experience evaluated as of Dec. 31, 2024. The main driver: lost-time claim frequency keeps falling. Fewer injuries, fewer claims relative to premium.
Does a loss cost decrease mean my premium goes down?
Not automatically, and this is where most Tennessee business owners lose money. A loss cost is only the portion of the rate meant to pay losses. Each carrier applies its own loss cost multiplier for expenses and profit, then your experience modification factor, class code and payroll finish the math. A 2% reduction in loss costs can be completely erased by a higher multiplier, a payroll audit, a class code that no longer matches the work, or a mod that has not been reviewed.
| Detail | Value |
|---|---|
| Voluntary market loss cost change | -2.0% |
| Assigned risk rate change | -1.1% |
| Orders signed | Dec. 23, 2025 |
| Effective | March 1, 2026 (new and renewal) |
| Consecutive annual declines | 13 |
| Filing submitted by NCCI | Sept. 24, 2025 |
| Experience period | Policy years 2022-2023, valued 12/31/2024 |
| Primary driver | Declining lost-time claim frequency |
Who does this affect in East Tennessee?
Anyone carrying workers compensation - contractors, restaurants, retail, property management, cleaning and landscaping crews, hospitality staff across Sevier County, and every construction trade working the Knoxville corridor. In Tennessee, construction employers generally must carry coverage at a lower employee threshold than most industries, so small crews are in scope more often than owners assume.
What should a business owner check at renewal?
- Ask for your carrier's loss cost multiplier. Two carriers using the same approved loss costs can quote very different premiums.
- Verify your class codes. A misclassified crew is the most common overcharge in small-business comp.
- Review your experience mod and the claims behind it. Old claims roll off; a mod nobody has audited quietly overcharges you.
- Reconcile payroll estimates before the audit, not after the audit bill arrives.
- Separate subcontractor certificates. Uninsured subs get added to your payroll at audit.
- Ask about a safety credit or drug-free workplace program - documented safety is what produced these statewide decreases in the first place.
Will the streak continue?
State officials tie the decreases to safer workplaces and lower lost-time claim frequency. But this was the smallest reduction in years, and medical severity has been trending the other way. Treat 2026 as the year to lock in structure - correct codes, a clean mod, documented safety - rather than assuming next year hands you another discount.
Seasons change. So should your coverage.
Run a crew in East Tennessee? Have your workers comp class codes and mod reviewed before renewal.
Call All Seasons Insurance Group: 865-263-1400Or request a business insurance review at asigtn.com/get-a-quote.
Sources
- Tennessee Department of Commerce and Insurance, "TN Workers Comp Rates Decline for 13th Year in 2026," Feb. 11, 2026 (orders signed Dec. 23, 2025; -2.0% voluntary loss costs, -1.1% assigned risk, effective March 1, 2026)
- NCCI, "Summary of the Proposed Tennessee Workers Compensation Loss Cost and Assigned Risk Rate Filings Effective March 1, 2026" (filed Sept. 24, 2025)
- Business Insurance, Feb. 13, 2026; Insurance Journal, March 23, 2026
This article summarizes public regulatory filings and is general information only, not a coverage opinion, quote, or legal advice. Individual premiums vary by carrier, class code, payroll and experience.
