Tennessee Workers' Comp Exemption: Rules, Fees, How to Apply

A Tennessee workers’ comp exemption lets the owner of a construction business opt out of carrying workers’ compensation insurance on themselves. You apply to the Workers’ Compensation Exemption Registry, which is run by the Tennessee Bureau of Workers’ Compensation, and an approved exemption is valid for two years. It covers only the owner named on it. Every employee still has to be insured.

The short version:

• The registry is only for owners in the construction industry: sole proprietors, corporate officers, and partners or LLC members who own at least 20 percent.
• The first application costs $50 if the business holds a state contractor’s license and $100 if it does not, according to the Bureau’s forms and FAQ page.
• You apply as an individual with form LB-4523, online, by mail, or in person in Nashville. A business entity cannot apply.
• On a commercial construction project, no more than three exempt providers can work without coverage, and the general contractor chooses them.
• An exempt owner gives up their own workers’ comp benefits if they are hurt on the job.

This is general information, not legal or insurance advice. Fees, forms, and rules change; confirm them with the Bureau before you file.

What the exemption is, and why construction has its own rule

In most Tennessee industries, sole proprietors, partners, and LLC members are not counted as employees who must be insured. Construction is different. State law says every construction services provider has to carry workers’ compensation on themselves, and it applies that rule even to firms with fewer than five employees, the size below which other employers are generally outside the law. The exemption registry is the way out of that requirement for owners who qualify.

The rules sit in Tennessee Code Annotated, Title 50, Chapter 6, Part 9. Two points shape everything else:

• The exemption is personal. It belongs to an individual owner, not to the company. The Bureau says plainly that employees cannot use the registry and that an exempt employer must still cover all employees, “even if they have only one employee.”
• Being listed is not the whole test. The statute exempts a listed provider only in certain situations, described below. On commercial projects the limits are tight.

The registry was first run by the Secretary of State when it opened in 2011. It is now handled by the Bureau of Workers’ Compensation, which is why some older guides and county pages still send applicants to the wrong office.

Who qualifies

The applicant must work in the construction industry, or be a construction services provider, and must fit one of the ownership categories the Bureau lists:

Source: Tennessee Bureau of Workers’ Compensation, Insurance Exemptions.

A few limits apply on top of that, all from the Bureau’s FAQ:

• Five people per business. A corporation, LLC, partnership, or family-owned business can have up to five individuals on the registry. A sole proprietor gets one exemption.
• A federal tax ID is required. Every business you claim an exemption through needs an FEIN, including a sole proprietorship.
• The business must be in good standing. Corporations, LLCs, and limited partnerships need to be active and current with the Secretary of State, with fees and taxes paid.
• One exemption per business. If you own a second construction company, you file a “subsequent” exemption for it with form LB-4530.

Where an exemption actually applies

This is the part most summaries leave out. Under section 50-6-902, a construction services provider is excused from insuring themselves only in these situations:

1. They are on the registry and working on a project that is not a commercial construction project.
2. They are on the registry, working on a commercial project, and the contractor they work for has named them as one of its permitted exempt providers.
3. They are already covered under the workers’ comp policy of the person or company they are working for.
4. They are working directly for the property owner, and are not acting as a general or intermediate contractor who subcontracts the work.
5. They are building or repairing on their own property.
6. The work is “casual” employment as the workers’ comp law defines it.

Situations 3 to 6 do not depend on the registry at all. Situations 1 and 2 do.

The three-provider limit on commercial projects

On a commercial construction project, a maximum of three construction services providers may be exempt for the life of the project, and that count includes the general contractor’s own exempt owners. The general contractor has to tell each one in writing that they have been selected and keep a list for its insurer’s audit, according to a policyholder notice from the Department of Commerce and Insurance.

If you hold a valid exemption but are not one of the three, your work on that project is charged to your own workers’ comp policy. In practice that means a registered subcontractor can still be told to bring a policy to a commercial job. Ask the general contractor before you bid whether you will be one of its designated providers.

What it costs

Source: Tennessee Bureau of Workers’ Compensation, exemption registry forms and FAQs, checked 11 November 2026. The renewal form lists its own fee, so read the current version before you pay.

Compare the fee with what you give up. An exempt owner who is injured at work has no workers’ comp claim: no medical benefits and no wage replacement from a policy. Health insurance may exclude work injuries, so check yours before you opt out.

How to apply

1. Check your business record. If the business is a corporation, LLC, or partnership, confirm it is active with the Secretary of State and that you appear as an officer, member, or partner.
2. Get an FEIN if you do not have one. Sole proprietors need one too.
3. Complete form LB-4523, the Initial Workers’ Compensation Exemption Registration Application. The applicant is the individual owner, not the company. The Bureau’s instructions for the initial application walk through each box.
4. Say whether the business has a contractor’s license. If it does not, the application also registers you as a construction services provider, which is what the higher fee pays for.
5. File and pay. You can e-file, print and mail the form, or walk it in to the Bureau at 220 French Landing Drive, Suite 1B, Nashville, TN 37243. Walk-in filers need photo ID.
6. Watch your email. The Bureau sends notices to the email address on the application, so check your spam folder.

The Bureau says the online application works best on a laptop or desktop. For questions, the exemption registry’s line is (615) 532-1319 and its email is wc.exemption@tn.gov.

How long it lasts and how to renew

An exemption is valid for two years. You can start the renewal 60 days before it expires, using the renewal form, and the Bureau sends a renewal notice inside that 60-day window. If you move or change your email, file the change of address form (LB-4524) so the notice reaches you. A lapsed exemption means you are an uninsured construction services provider again until it is reinstated.

You can also end an exemption early with a voluntary revocation (form LB-4529), for example when you decide to buy a policy that covers you.

How to check someone else’s exemption

General contractors and homeowners can look up a provider in the registry’s online search, linked from the Bureau’s exemption pages. Check the name on the exemption against the person who will actually be on site, and remember that the exemption says nothing about the subcontractor’s employees. If the sub has workers, ask for a certificate of insurance as well.

Exemption, ghost policy, or a real policy?

Frequently asked questions

Does a Tennessee workers’ comp exemption cover my employees?

No. It covers only the owner named on the registry. The Bureau says exempt employers must still insure all of their employees, even a single one.

Can a business that is not in construction use the registry?

No. Registration is open only to individual owners in the construction services industry. Other owners follow the general rules on who counts as an employee.

Can my LLC apply for the exemption?

No. A business entity cannot apply. Each qualifying owner applies as an individual, and up to five individuals per business can be listed.

How much does the Tennessee exemption cost?

The initial filing is $50 for a business with an active contractor’s license and $100 without one. Subsequent exemptions for other businesses are $20 each.

How long is the exemption good for?

Two years. Renewal can begin 60 days before the expiry date.

Can I work on a commercial job with an exemption?

Only if the general contractor names you as one of the three exempt providers allowed on that project. Otherwise your work there has to be insured.

Where to go from here

Confirm your ownership category, then read form LB-4523 and its instructions before you pay. If you have employees, price their coverage first; our guide to workers’ compensation insurance for small business explains how premiums are set, and the workers’ comp cost calculator gives a rough figure from payroll. If you work across state lines, compare the Florida workers’ comp exemption and New York’s CE-200 certificate, which work differently. Arhox is an independent publication, not an insurer, broker, or law firm; our editorial policy and disclaimer explain how these guides are prepared.