General contractor insurance in Tennessee
Learn about business insurance requirements and the most common policies for general contractors in Tennessee.
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Insureon helps general contractors find insurance quotes that match their unique risks.
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What are the most common policies for general contractors in Tennessee?
General contractors may need different types of insurance depending on the work they do and their client contracts. These policies are the most popular for general contractors in Tennessee, and often provide the best coverage for their insurance needs.
General liability insurance
This policy covers basic risks, such as a client who trips over your toolbox and suffers an injury. Bundle it with commercial property insurance for savings in a business owner's policy.
- Customer bodily injuries
- Damaged customer property
- Product liability insurance
Business owner's policy
A BOP bundles general liability coverage and commercial property insurance at a discount. It's often the most cost-effective type of insurance for general contractors.
- Accidents that injure clients
- Client property damage
- Damage to your building or its contents
Workers’ compensation insurance
Most states require workers’ comp for general contracting businesses that have employees. It also protects sole proprietors from work injury costs that health insurance might deny.
- Employee medical expenses
- Disability benefits
- Employee injury lawsuits
Commercial auto insurance
This policy covers the cost of injuries and property damage in accidents involving a general contractor’s vehicle. It can also pay for repairs to vehicles damaged by weather or vandalism.
- Legal costs from an auto accident
- Property damage caused by your vehicle
- Vehicle theft and vandalism
Inland marine insurance
This policy helps pay for repair or replacement of a contractor’s saws, nail guns, hammers, and other tools if they're lost, stolen, or damaged. It's also called tools and equipment insurance.
- Hand tools and power tools
- Scissor lifts and other equipment
- Other items brought to worksites
Professional liability insurance
This policy is also called errors and omissions (E&O). It covers legal fees when a general contractor is sued over a mistake, such as using the wrong materials.
- Accusations of negligence
- Failure to complete a project
- Work mistakes and oversights
Contractor surety bonds
A bond guarantees reimbursement for the client if a general contractor fails to fulfill the terms of a contract or adhere to building codes. Common bonds include bid bonds, performance bonds, and payment bonds.
- Compliance with laws
- Incomplete jobs
- Breach of contract
Builder's risk insurance
This policy covers structures in progress and materials, often paying for damage caused by fire, vandalization, and non-severe weather events.
- New construction
- Building renovation
- Worksite theft and vandalism
Contractors pollution liability insurance
Contractors pollution liability covers costs related to pollution, such as a lawsuit alleging harm caused by exposure to silica dust on a construction job site. It's sometimes referred to as environmental insurance.
- Pollution events
- Spills during transport
- Lawsuits over contaminants
What insurance is required for general contractors in Tennessee?
General liability insurance
General liability insurance is the foundation of a general contractor’s protection. It covers legal fees related to accidents that damage a client's property or cause a bodily injury, along with libel and other advertising injuries.
Contractors in Tennessee are required to have a general liability policy with varying minimum requirements depending on the size of the contract. You may also need this policy to sign a commercial lease or meet the terms of a client's contract. Adding commercial umbrella insurance can boost the coverage limits on commercial general liability insurance and other policies.
Tennessee's general liability requirements [PDF] for contractors are:
- $100,000 for jobs valued up to $500,000
- $500,000 for jobs worth $500,001 to $1,500,000
- $1,000,000 for jobs worth $1,500,001 or more
Workers' compensation insurance
If you own a construction or home improvement business in Tennessee with one or more employees, your business is required to carry workers' compensation insurance.
Workers' compensation insurance covers medical costs and disability benefits when an employee is injured on the job or develops an occupational illness. It's a key policy for the construction industry and related professions, such as carpenters, electricians, and plumbers.
Sole proprietors may not need workers' comp for their Tennessee general contractor license, but it's still a good idea to carry this insurance coverage. Personal health insurance doesn't cover work-related personal injuries, so it can save you from out-of-pocket medical expenses.
Commercial auto insurance
Business vehicles in Tennessee must be covered by commercial auto insurance.
Commercial auto insurance protects business vehicles owned by your general contracting company. It covers property damage and medical bills in an accident, along with vehicle theft, weather damage, and vandalism.
How much does insurance cost for general contractors in Tennessee?
General contractors in Tennessee who buy policies from Insureon pay an average of:
General liability: $100 per month
Workers' compensation: $506 per month
Commercial auto: $161 per month
Several factors affect the cost of general contractor insurance, including:
- Type of building construction, such as townhouses, multifamily homes, or offices
- Business property and equipment
- Business income and size
- Years of work experience
- Location, such as Nashville or Memphis
- Policy limits and deductibles
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When do you need a general contractor business license in Tennessee?
In Tennessee, general contractors must be registered and licensed to work on projects worth more than $3,000. Depending on the license type [PDF], your requirements for obtaining the license might vary.
There are four types of licenses, which determine the size of projects the licensee can undertake:
- Contractors: Allows you to obtain and work on projects worth $25,000 or more.
- Limited license electrician (LLE): Lets you work on electrical projects where the cost is less than $25,000.
- Limited license plumber (LLP): Enables you to work on plumbing contracts that don't exceed $25,000.
- Home improvement: Allows you to work on residential remodeling projects from $3,000 to $24,999.
Licensure requirements include the following steps:
- Testing
- Financial statement from a certified accountant
- Letter of reference and proof of insurance
- For corporations and limited liability companies (LLCs), proof of registration and other documentation
- Complete contractor’s affidavit
- Submit application and $250 fee
- Board review
View additional details on the Tennessee Department of Commerce and Insurance website.
How do I get Tennessee contractors insurance?
Insureon’s industry-leading technology helps general contractors in Tennessee save time and money shopping for business liability insurance and property insurance. Start an online application to get free quotes from top-rated U.S. insurance companies.
To make the application go quicker, have this information ready:
- Workforce details, such as the number and types of employees
- Current and projected revenue
- Business partnerships
- Insurance history and prior claims
- Commercial lease insurance requirements
Our licensed insurance agents can answer your questions and help you find the right, most affordable coverage for your Tennessee business. Small business owners can get their certificate of insurance (COI) shortly after they apply for quotes and pay for a policy.