Tennessee Approves Smallest Drop in Workers’ Compensation Costs in Years

The average workers’ compensation rates for the Tennessee voluntary market should drop about 2% this year, marking the 13^th straight year for lower rates in the state. It’s also the smallest decrease in years.

“Safer workplaces where Tennessee workers are receiving fewer injuries on the job are helping contribute to the latest loss-cost reduction,” Tennessee Insurance Commissioner Lawrence said in a bulletin. “These reductions indicate a healthier workplace for Tennesseans as they result from decreases in lost-time claim frequency and more stable claims costs.”

The commissioner approved a 2% loss-cost decrease recommended in September by the National Council on Compensation Insurance. Lawrence also signed off on a 1.1% average decrease in average assigned risk rates for the state, according to recent orders.

The reductions take effect March 1 and follow a 3.6% average loss cost decrease for 2025; a 9.4% decrease for 2024; a 10.2% decrease in 2023; and a 5.6% decrease in 2022.

Workers’ compensation rates have fallen steadily over the last two decades across the country, although many states saw relatively tiny decreases in 2025 and 2026. Research suggests safer workplaces and fewer litigated claims have contributed to fewer injuries and reduced costs for employers and insurers.

Tennessee recently ranked 39^th among states in the average premiums, with rates well below the U.S. median, according to the 2024 Oregon Department of Consumer and Business Services, which studies comp rates every two years. That was a drop from 35^th place in 2022, making Tennessee one of the least-expensive states on comp costs.

Claimants’ lawyers have said that statutory changes in 2018 and 2019 trimmed attorney fees and have made it difficult for injured workers to find representation when claims are denied.

Some voices in the industry, including roofing company associations in Florida, have warned that rates may be dropping so much that it could make some employers complacent about safety, and has prompted some insurers to avoid writing compensation insurance for certain classifications.

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Workers’ Compensation
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