Correction: This story was updated Wednesday, Dec. 1, 2021, at 7 p.m. to indicate workers' compensation insurance premiums were reduced for the ninth consecutive year, not month.

Tennessee is cutting what employers pay for workers' compensation insurance again next year as reforms rolled out for the injured employee program seven years ago continue to cut program costs.

The Tennessee Department of Commerce and Insurance announced Tuesday that it will reduce average workers' compensation insurance premiums for the ninth consecutive year, adding another 5.6% savings from lower loss costs in the past year.

Although employer-specific premiums are based on the type of work done by employees and their track record of worker injuries, most employers should pay less next year. Since 2014, when Tennessee moved the state's workers' compensation claims process from a tort system to an administrative one, injured workers usually get benefits quicker but no longer may use attorneys in court to challenge decisions on their claims.

Insurers and employers complained in the past that the judicial appeal process led to unpredictable, inconsistent and more favorable rulings for injured workers from courts than the administrative claims process used today.

"We have a lot of members who have seen their rates go down anywhere from 20 to 80% over the last five or six years, and that's what we were hoping for when these reforms were adopted in 2013 and implemented in 2014," said Jim Brown, the Tennessee state director for the National Federation of Independent Business. "Under the old workers comp system, we had businesses that were contemplating leaving the state, but now we're seeing businesses like Southern Champion Tray and McKee Foods expanding here."


Order for Tennessee workers comp rate reductions


Workers' compensation insurance is an employer cost that provides coverage when an employee is hurt on the job. It pays for medical coverage as well as payments for lost wages if a person is unable to come to work due to their on-the-job injury.

Tennessee has a voluntary, competitive insurance market made up of about 400 companies licensed to sell workers' compensation insurance. Insurance carriers combine the National Council on Compensation Insurance loss cost filings with each company's experience and expenses to develop particular insurance rates for an employer.

Since Tennessee's workers' compensation system reforms began in 2014, loss cost reductions of over 59% have been approved, representing substantial savings for Tennessee employers. Over the long term, worker injury costs are also being cut as more employees move into less physically demanding jobs.

"The decline of workers' compensation insurance premiums is an important factor in creating a pro-business atmosphere in Tennessee where companies can grow, employees can prosper and our state can continue to attract high-paying jobs," Tennessee Gov. Bill Lee said in a statement Tuesday.

But organized labor leaders complain that some of the pro-business changes adopted in Tennessee's workers' compensation program have hurt injured workers who don't have the same access to legal assistance and court intervention for help that they once had.

"The folks in our workers' comp system do a really good job trying to help injured workers, but it's slanted to the advantage of the companies," said Billy Dycus, president of the Tennessee AFL-CIO labor union.

Although it is illegal, Dycus said he still hears complaints from injured workers who say they are told by employers if they try to file a workers' comp complaint they will be fired from their job.

Tennessee Insurance Commissioner Carter Lawrence said the overall loss cost decrease will become effective for next year on March 1 for new and renewal policies.

"These reductions reflect the continued trend of safer workplaces and will mean Tennessee employers may now have more money to invest back into their businesses and employees which will help bolster Tennessee's economy," Lawrence said in a statement Tuesday.

Contact Dave Flessner at or at 423-757-6340.

Largest workers comp insurance companies in Tennessee

1. Travelers

2. AF Group

3. The Hartford

4. Liberty Mutual

5. Great American Insurance

6. Chubb

7. Zurich

8. Berkshire Hathaway

9. W.R. Berkley

10. Builders Mutual

Source: S&P Global Market Intelligence, based on direct premiums written in 2020 in Tennessee