The “Volunteer State” is home to so many American cultural mainstays, it’s hard to keep count. The history of rock n’ roll, barbecue, and even American whiskey are tied to Memphis, Nashville, and Tennessee more broadly. Even our national obsession with spicy chicken got its start in Tennessee.1

According to its 2020 Small Business Association Profile, Tennessee is also a great place to start a business.2 Over 1.1 million Tennessee workers were employed across its 620,125 small businesses, making up 99.5% of all business in the state. If you could picture “walking in Memphis” as a business owner, you’ll need the right insurance.

What business insurance am I required to get in Tennessee?

Tennessee workers’ compensation insurance

In most cases, all employers in Tennessee with five or more employees are legally required to have workers’ compensation insurance. If you’re in the construction industry, you must carry workers’ comp if you have one or more employees. Workers’ compensation insurance exists to safeguard employees from financial impact related to injuries or illnesses sustained on the job. As a business owner, it also protects you from liability related to employee injuries. Workers’ compensation covers expenses and lost wages caused by the following:

  • Work-related accidents and injuries, such as repetitive stress injury, and resulting disability
  • Illnesses caused by or related to employment

Tennessee auto liability insurance

If you drive a car, truck or van as part of your business operation, you’re required to have auto liability insurance or qualify as a self-insurer. Auto liability insurance can protect you and your business from the financial consequences of the following types of third-party claims resulting from auto accidents involving your vehicle:

Bodily injury – If you get into an accident and the driver or a passenger of the other vehicle is injured, your auto bodily injury liability insurance covers the costs arising out of bodily injury, including medical expenses and death benefits.

Property damage – In the above scenario, it’s extremely likely the other car sustained some damage as well. Your auto policy’s property damage liability coverage insures the cost to repair or replace the other party’s vehicle.

Also, depending on the use of your vehicle, the kind of vehicle or if your vehicle is registered or titled under your business name, you may need a commercial auto insurance policy to secure the appropriate coverage and vehicle registration, and avoid penalties.

What other types of business insurance are recommended for Tennessee?

Tennessee general liability insurance

General liability insurance (also known as CGL—for commercial general liability) is one of the most essential and effective ways to safeguard your business. It protects your business from the financial consequences resulting from liability related to third-party non-employee bodily injury or third party property damage that arises from your business operations. It also provides coverage for personal and advertising injury. Without general liability insurance coverage, you could be in financial trouble in the event of an unfortunate accident involving a customer or other third party.

Tennessee professional liability insurance

If you provide professional services and your advice is alleged to have led to one of your clients suffering a financial loss, professional liability insurance can help. When a former customer or client claims—rightly or wrongly—that a mistake in your work led them to suffer a financial loss, professional liability insurance provides you with investigation and defense of the claim as well as making payments of any settlements or judgments.

Inland marine insurance

Inland marine insurance is designed to protect that vital equipment you use to make your business run smoothly. It protects your business by covering costs associated with accidentally damaged, lost or stolen equipment that is on the go with you. Whether you have an expensive tool collection, pricey construction materials, or other equipment you transport to a job site, having inland marine insurance is a no-brainer. At Thimble, we offer inland marine insurance, or Business Equipment Protection as we call it, with coverage for up to $5,000 worth of business property and equipment.

Commercial property insurance

Commercial property insurance protects your company’s building and the contents inside it from all kinds of risks of physical loss or damage, including theft, vandalism, fires and natural disasters such as floods, storms or earthquakes. Commercial property insurance is often included as part of a Business Owners’ Insurance Policy, or BOP.

Professions covered in Tennessee

No matter what your business is, if you’re in Tennessee, you’ll benefit from being insured. If a non-employee slips and falls due to a workplace hazard or you accidentally damage a client’s property while working in their home, the last thing you need is to pay out-of-pocket for damages. In Tennessee, Thimble’s business insurance covers:

Cost of business insurance in Tennessee

At Thimble, the cost of your small business insurance depends on a variety of factors. The amount of risk involved in your business, the industry you’re in, and the amount of business you do all play a part in determining your policy premium.

Another important factor is your location. Larger cities like Memphis or Nashville might have higher premiums on average than smaller municipalities like Clarksville or Johnson City.

Finally, Thimble will look at factors such as your crew size, coverage amount and the number of years you’ve been in business before determining how much your premium will be.

Median Tennessee insurance costs

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Top cities for businesses in Tennessee

  • Chattanooga
  • Clarksville
  • Cleveland
  • Jackson
  • Johnson City
  • Kingsport
  • Knoxville
  • Memphis
  • Morristown
  • Nashville

Bottom line: Tennessee business insurance

The Volunteer State isn’t just the cultural mecca of the South—it’s a small business owner’s paradise. With over a million small businesses operating in the state, it’s no wonder you’re looking to start your own venture in Tennessee. And just like all successful businesses, having a good handle on the ins and outs of small business insurance requirements is key to keeping things running smoothly.

Even if you’re just starting up, you can find Tennessee business insurance coverage that’s right for you. Through Thimble, you can get a quote for your general liability insurance, professional liability insurance or Business Equipment Protection in less than a minute and if you decide to buy, you’ll be able to access your policy and Certificates of Insurance (COIs) in your inbox instantly.


  1. The Culture Trip. A Brief History of Hot Chicken, Nashville’s Spicy Specialty.
  2. U.S. Office of Small Business Administration. Tennessee Small Business Economic Profile.