Commercial Lines Bulletin

 

February 15, 2011

 

To our Tennessee Agency Partners:

 

Changes in Workers’ Comp requirements announced

 

Significant coverage and exemption requirements are being implemented in the state of Tennessee.  Effective March 1, 2011, all owners, officers, LLC members and partners of a business in the construction industry will be automatically included on Workers’ Compensation policies in the state.

 

In order to be excluded all of the above must register as excluded with the state. Qualifying individuals may do so at this website:  http://tnbear.tn.gov/wc/

 

Any registrants through this site will be excluded until their next birthday plus an additional 2 years, expiring on their birthday. At that time, registrants must reapply in order to retain their excluded status.

 

 

Below are highlights from the actual notice from the state of Tennessee.

 

“…Effective March 1, 2011, pursuant to Public Chapter 1149, owners of a construction entity may apply for an exemption to the workers’ compensation insurance coverage requirement for themselves by registering with the Tennessee Secretary of State as a “Construction Services Provider”. Otherwise, all owners will be required to provide coverage on themselves, in addition to all of their employees as part of the contractor and home improvement licensing process….”

Further, it states:

“Proof of Insurance Requirements

Currently, in order to obtain or renew a contractor or home improvement license, the Board’s statute requires contractors to supply proof of workers’ compensation insurance coverage. Prior to the law change, several contractors as owners of the licensed entity (sole proprietors, partnerships, LLC’s) and with zero employees were exempt from coverage for themselves (except for corporations). However, effective March 1, 2011, all contractors (including those without employees) will be required to provide proof of coverage for themselves as owners or supply the Board proof of exemption in the form of their registration as a “Construction Services Provider”. There are limitations as to the number of exemptions, therefore, if there are more than three (3) owners (other than family members), you may not qualify from submitting proof of coverage for those additional owners. Please see the law from our website for more detailed information.”

Commercial Construction Project

 

Commercial Construction Projects must meet the following criteria:

 

All Commercial Construction Projects will have a limit of three sub-contracted officer exclusions per construction service provider. The three construction service providers eligible for officer exclusions will be determined by a list the General Contractor is required to maintain. The first three construction service providers on the list maintained by the General Contractor will be eligible for up to three officer exclusions each. The order of construction service providers is determined by the order they are contracted to the job.

 

A) Any project larger than 4 family unit residences or more than three (3) stories high (ie: Condominium with 5 units, or 2 units with 4 stories)

 

(B) Construction of any project for public use valued at more than $750,000

 

(C) Does not include projects performed by or for public utilities (ie: electric, water, cable, telephone)

 

Should you have any questions or concerns, please contact your Field Manager or Underwriter, and as always, thank you for your loyalty to Frankenmuth Insurance.