Tennessee LLC for Construction — Licensing & Insurance
Construction businesses in Tennessee need LLC protection given the industry's high liability exposure. Tennessee requires a state contractor license for most projects and mandatory workers' compensation for employees. For formation, see how to form a Tennessee LLC.
Tennessee Contractor Licensing
Tennessee Board for Licensing Contractors regulates:
- General contractors
- Electrical contractors
- Plumbing contractors
- HVAC contractors
- Masonry, roofing, and other specialty trades
License required for projects exceeding $25,000 (including materials and labor). Projects under $25,000 may not require state licensing, but local requirements may still apply.
Apply through the Tennessee Board for Licensing Contractors at tn.gov/commerce.
Workers' Compensation (Mandatory)
Tennessee requires workers' compensation for employers with 5+ employees (construction: may apply at fewer employees depending on classification). Key points:
- Mandatory for most construction employers
- Sole proprietors/LLC members can opt out of their own coverage
- Subcontractors without coverage may be deemed your employees
- Get through private insurer or assigned risk pool
Insurance Requirements
Ready to get started?
Get Started| Type | Required? | Notes |
|---|---|---|
| Workers' comp | Yes (5+ employees) | Construction-specific rules |
| General liability | Effectively required | $1M+ recommended |
| Commercial auto | If business vehicles | Required |
| Builder's risk | By contract usually | Active projects |
| Contractor's license bond | For licensing | Required by Board |
FAQ
Do I need a license for projects under $25,000?
At the state level, no . But local municipalities may have their own licensing requirements regardless of project size.
What about the per-project LLC strategy?
At $300 formation + $600/year per entity, per-project LLCs are expensive in Tennessee. Reserve this for very large projects ($500K+) where the risk justifies the cost.