Construction Claim Rules in Tennessee

Statutory interest rate

Floating, reset twice yearly (postjudgment); currently 8.75%/year for Jul 1 to Dec 31, 2026; up to 10%/year (discretionary prejudgment)

Postjudgment: 2 percentage points below the formula rate published by the state's Commissioner of Financial Institutions, reset every Jan 1 and Jul 1 (or the contract's own rate, if specified). For Jul 1, 2026 through Dec 31, 2026 this works out to 8.75% per year. The rate in effect on the date judgment is entered applies for the life of the judgment and does not change if the formula rate later moves. Prejudgment interest on a contract claim is separately discretionary, awarded 'as equity requires,' capped at an effective 10%/year.

Compounding: Not confirmed; statute is silent; generally treated as simple in practice

Citation: Tenn. Code Ann. §§ 47-14-121, 47-14-123

Source: https://www.tncourts.gov/tennessee-judgment-interest-rates

Last checked: 2026-08-23

The tncourts.gov judgment-interest-rates page (the primary source for the published semiannual rate) was behind a bot-protection interstitial this pass, so the 8.75% figure was confirmed through a secondary source instead: the University of Tennessee's MTAS municipal-courts reference page, which states the AOC-published rate for Jul 1 to Dec 31, 2026 is 8.75%. This is also consistent with the TDFI's formula rate announcement (10.75% as of mid-August 2026, itself set at 4 points over a 6.75% weekly average prime rate): 10.75% minus 2 points equals 8.75%, matching the postjudgment figure. Given two independent, mutually consistent sources, this figure is reasonably reliable, but it was not confirmed directly against the tncourts.gov page itself and should be spot-checked there when accessible.

Accrual: breach of contract claim

Fully discretionary: no fixed statutory accrual date

Tenn. Code Ann. § 47-14-123 allows courts and juries to award prejudgment interest 'in accordance with the principles of equity,' capped at an effective 10% per year. The statute doesn't specify an accrual date; it's decided case by case rather than defaulting automatically to the breach date.

Citation: Tenn. Code Ann. § 47-14-123

Source: https://law.justia.com/codes/tennessee/2023/title-47/chapter-14/part-1/section-47-14-123/

Like New Jersey's contract rule and Pennsylvania's rule for unliquidated damages, this is a genuinely discretionary mechanism; don't assume a guaranteed date-of-breach start.

Accrual: property damage / tort claim

Same equitable, discretionary mechanism as contract claims

The same statute, Tenn. Code Ann. § 47-14-123, governs prejudgment interest on property-damage and other claims; there is no separate date-of-loss rule; courts and juries retain equitable discretion over both whether to award it and what date to use.

Citation: Tenn. Code Ann. § 47-14-123

Source: https://law.justia.com/codes/tennessee/2023/title-47/chapter-14/part-1/section-47-14-123/

Actual Cash Value rule

Broad evidence rule: materials can be depreciated, labor cannot

Tennessee Supreme Court held that when calculating ACV via replacement-cost-minus-depreciation, an insurer may depreciate materials but not labor.

Citation: Lammert v. Auto-Owners (Mutual) Ins. Co., 572 S.W.3d 170 (Tenn. 2019)

Source: https://www.tncourts.gov/courts/supreme-court/opinions/2019/04/15/gregory-j-lammert-et-al-v-auto-owners-mutual-insurance

ACV statute or regulation

Tennessee has a regulatory ACV-calculation rule, but the ban on depreciating labor comes from a state Supreme Court decision interpreting it, not from statutory text that itself singles out labor.

Tenn. Comp. R. & Regs. 0780-01-05-.10(2), part of Tennessee's Unfair Claims Settlement Practices rules for fire and extended-coverage policies with replacement cost coverage, defines actual cash value as replacement cost of the property at the time of loss less depreciation, if any, and requires the insurer to provide the insured, on request, a copy of the claim file worksheets detailing any depreciation deductions. The regulation's text does not itself single out labor. Separately, in Lammert v. Auto-Owners (Mut.) Ins. Co., 572 S.W.3d 170 (Tenn. 2019), the Tennessee Supreme Court held that insurers may not depreciate labor cost, reasoning that ordinary usage of depreciation refers to physical wear and that labor, being intangible, cannot physically depreciate. That holding governs in practice but is judicial contract interpretation applied against the regulatory backdrop, not a legislative or regulatory provision that bans labor depreciation on its face.

Citation: Tenn. Comp. R. & Regs. 0780-01-05-.10(2); Lammert v. Auto-Owners (Mut.) Ins. Co., 572 S.W.3d 170 (Tenn. 2019)

Source: https://www.law.cornell.edu/regulations/tennessee/Tenn-Comp-R-Regs-0780-01-05-.10

Recoverable depreciation holdback

No Tennessee statute or regulation found that sets a deadline or notice requirement for paying out withheld depreciation once repairs are completed.

The applicable regulation, Tenn. Comp. R. & Regs. 0780-01-05-.10, addresses how ACV and replacement cost are computed and what depreciation documentation insurers must disclose, but contains no provision governing the timing of, or the insured's window for, recovering held-back depreciation once repairs are finished.

Citation: Tenn. Comp. R. & Regs. 0780-01-05-.10

Source: https://www.law.cornell.edu/regulations/tennessee/Tenn-Comp-R-Regs-0780-01-05-.10

Checked the state's fire and replacement-cost claims-settlement regulation directly; it does not address depreciation holdback timing, and no separate holdback-specific statute was located.

“No damages for delay” clause enforceability

Enforceable, even when results are harsh, with the standard four exceptions

Tennessee courts (through its intermediate Court of Appeals) enforce a no-damages-for-delay clause according to its terms, even where the result seems harsh to the contractor, while recognizing the same four exceptions found in most other states: delay not contemplated by the parties; delay amounting to an abandonment of the contract; delay caused by the other party's bad faith; and delay involving active interference.

Citation: Brown Bros., Inc. v. Metro. Gov't of Nashville, 877 S.W.2d 745 (Tenn. Ct. App. 1993); Thomas & Assocs., Inc. v. Metro. Gov't of Nashville, No. M2001-00757-COA-R3-CV, 2003 WL 21302974 (Tenn. Ct. App. 2003); Haren Constr. Co. v. Metro. Gov't of Nashville, No. M2002-01135-COA-R3-CV, 2003 WL 21537623 (Tenn. Ct. App. 2003)

Source: https://www.woodsaitken.com/sites/default/files/Survey_50-State-Matrix_Pay-If-Paid_No-Damage-for-Delay.pdf

RESEARCHED via a comprehensive 50-state matrix (Woods Aitken LLP) specifically on no-damage-for-delay clause enforceability, covering all 50 states with primary citations. Confirmed via independent survey.

Construction contract filing deadline

6 years for a contract action not otherwise expressly provided for

Tennessee's catch-all limitations period for an action on a contract not otherwise expressly provided for by statute is 6 years from accrual, covering an ordinary written construction-contract claim.

Citation: Tenn. Code Ann. § 28-3-109(a)(3)

Source: https://law.justia.com/codes/tennessee/title-28/chapter-3/part-1/section-28-3-109/

State unemployment insurance (SUTA)

New employers pay a flat 2.7%. Experienced employers fall into one of two disjoint bands under Premium Rate Table 6: 0.01% to 2.3% for positive-rated employers, or 5% to 10% for negative-rated employers (no employer falls between 2.3% and 5%). Rates reset semi-annually (Jan. 1 and July 1), not annually. 2026 taxable wage base is $7,000.

Confirmed directly against tn.gov: Tennessee is one of the states that recalculates experience-rated premiums twice a year rather than once, tied to the reserve-ratio balance in each employer's UI account. Premium Rate Table 6 is in effect from July 1, 2026 through Dec. 31, 2026. The prior entry described a smooth 0.01%-10% range, which overstates the actual structure: the real range is two separate bands with a gap between them, not a continuum.

Citation: Tennessee Department of Labor and Workforce Development.

Source: https://www.tn.gov/workforce/employers/tax-and-insurance-redirect/unemployment-insurance-tax/ui-tax-rates.html

Last checked: 2026-08-26

CORRECTED: the experience-rated range is not a smooth 0.01%-10% continuum as previously stated; it is two disjoint bands (0.01%-2.3% positive-rated, 5%-10% negative-rated) confirmed directly against tn.gov. Also newly noted: Tennessee resets rates semi-annually, not annually.

Workers' compensation rating

Tennessee is an NCCI advisory state; workers' compensation rates are based on NCCI loss costs approved by the Tennessee Department of Commerce and Insurance.

Tennessee is one of the states where the National Council on Compensation Insurance (NCCI) files advisory loss costs and maintains class codes. Individual insurers file their own rates using NCCI loss costs as a base, subject to approval by the Tennessee Department of Commerce and Insurance. Coverage is written in the standard private voluntary and residual (assigned risk) markets; Tennessee is not a monopolistic state and workers' compensation is mandatory (not optional) for most employers with five or more employees.

Citation: Tenn. Code Ann. Section 50-6-101 et seq.; NCCI Tennessee state filings

Source: https://www.ncci.com/Articles/Pages/II_StateAdvisoryForumState_TN.aspx?state=Tennessee

Prevailing wage law

Tennessee has a narrow state prevailing wage law limited to state-funded highway, road and bridge construction over $50,000; it does not cover other public works such as schools or buildings.

The Tennessee Prevailing Wage Act for State Highway Construction Projects (Tenn. Code Ann. Sections 12-4-401 to 12-4-415) requires prevailing wages on state highway, road and bridge contracts exceeding $50,000, as determined by the Tennessee Prevailing Wage Commission. Tennessee has no general state prevailing wage law covering non-highway public works like schools, water systems, or public buildings; those projects are subject only to the federal Davis-Bacon Act when federal funds are involved, at the $2,000 federal threshold.

Citation: Tenn. Code Ann. Sections 12-4-401 to 12-4-415

Source: https://www.dol.gov/agencies/whd/state/prevailing-wages

Reporting from April 2026 indicates legislation was under consideration to expand state prevailing wage coverage to certain non-highway construction funded by federal or state highway funds; this should be reconfirmed against current Tennessee Code, since it could change the scope described above.

OSHA plan

TOSHA: full state plan, private + public sector

Tennessee operates TOSHA (Tennessee Occupational Safety and Health Administration), a full OSHA-approved state plan covering both private and public-sector employers.

Citation: 29 U.S.C. § 667; Tenn. Code Ann. § 50-3-101 et seq.

Source: https://www.osha.gov/stateplans/tn

Weight of an OSHA violation in a negligence case

Confirmed toward the stronger end: a federal court applying Tennessee law held an OSHA violation may be conclusive evidence of negligence or negligence per se under certain circumstances

The Sixth Circuit, applying Tennessee law, held that under certain circumstances, an OSHA violation may be conclusive evidence of negligence or negligence per se; a notably stronger classification than the evidence-only treatment found in most other states in this dataset, though the 'under certain circumstances' qualifier means it isn't a blanket rule; the specific circumstances that trigger the stronger treatment weren't detailed in the source reviewed.

Citation: Ellis v. Chase Communications, Inc., 63 F.3d 473 (6th Cir. 1995) (applying Tennessee law)

Source: https://caselaw.findlaw.com/court/us-1st-circuit/1129348.html

Confirm what specific circumstances trigger the conclusive/per se treatment versus ordinary evidence treatment before treating this as a blanket rule.

Third-party contribution against the employer

A Tennessee statutory employer (principal contractor) enjoys the SAME exclusive-remedy immunity as the direct employer -- even if it never actually had to pay workers-comp benefits -- barring third-party contribution against it.

Under the statutory-employer rule, a principal contractor is secondarily liable for workers-comp benefits if the immediate/subcontractor employer cannot pay, and in exchange for that exposure, the principal contractor gains the SAME tort immunity as a direct employer (Tenn. Code Ann. Section50-6-108(c)), confirmed in Coblentz v. Tractor Supply Co., No. M2023-00249-COA-R3-CV (Tenn. Ct. App. Apr. 26, 2024) -- immunity applies even though the statutory employer never actually paid benefits, so long as it was exposed to the potential liability.

Citation: Tenn. Code Ann. Section50-6-108(c); Coblentz v. Tractor Supply Co., No. M2023-00249-COA-R3-CV (Tenn. Ct. App. Apr. 26, 2024).

Source: https://www.workerscompensation.com/daily-headlines/tenn-exclusive-remedy-bars-sales-reps-tort-claim/

CORRECTED: the prior citation (Parker v. Holiday Hospitality Franchising, Inc., 2010 Tenn. App. 82) was wrong-topic -- that case (confirmed real, decided 2014 by the TN Supreme Court, not a 2010 Court of Appeals decision) concerns a hotel guest's premises-liability claim over a collapsed shower bench, unrelated to workers-comp. Replaced with the real, current, on-point statutory-employer immunity authority.

Injury-severity gate on contribution claims

Narrow intentional-tort exception: an employee can sue the employer directly only by proving actual intent to injure -- a high bar.

Tennessee's exclusive-remedy rule generally bars suits against the employer for workplace injuries. The recognized exception requires the employee to prove the employer acted with actual intent to injure, not mere negligence or recklessness. Separately, T.C.A. Section50-6-112 always preserves the employee's right to sue a responsible third party (not the employer) in tort, with the workers' comp insurer holding a subrogation right against that recovery.

Citation: Tenn. Code Section50-6-101 et seq., Section50-6-112.

Source: https://www.workerscompensation.com/daily-headlines/tennessees-exclusive-remedy-rule/

RESEARCHED (not just linked): the prior entry honestly flagged the specific exception as unknown. Confirmed the exception is a narrow 'actual intent to injure' standard.

Distinctive state doctrine

CORRECTED/completed: Tennessee has a genuinely distinctive, construction-specific statutory framework -- Tenn. Code Ann. Part 9 (Section50-6-901 et seq.) requires nearly all construction services providers to carry workers-comp insurance regardless of size, with narrow, enumerated exemptions and a registry system, plus a design-professional exclusion from 'employee' status.

Unlike Tennessee's general small-employer exemption (five or more employees), Tenn. Code Ann. Section50-6-902 requires ALL construction employers to carry workers-comp coverage regardless of size, with only six narrow exemption categories (non-commercial project, three-or-fewer exempt providers on the project, already covered by another party's policy, working directly for the property owner without subcontracting further, working on one's own property, or casual employment). The statutory-employer rule also makes a principal contractor secondarily liable for a subcontractor's uninsured employees, extending exclusivity immunity in exchange (confirmed in Coblentz v. Tractor Supply Co., No. M2023-00249-COA-R3-CV (Tenn. Ct. App. Apr. 26, 2024)). Separately, licensed design professionals (architects, engineers, landscape architects, surveyors) are excluded from the definition of 'employee' under Tenn. Code Ann. Title 50, ch. 6 App.

Citation: Tenn. Code Ann. Section50-6-901 et seq. (Part 9, Construction Services Providers); Section50-6-902; Title 50, ch. 6 App. (design-professional exclusion); Coblentz v. Tractor Supply Co., No. M2023-00249-COA-R3-CV (Tenn. Ct. App. Apr. 26, 2024).

Source: https://www.dayontorts.com/no-personal-injury-case-against-statutory-employer.html

CORRECTED/completed: the prior entry was a vague placeholder ('General Tennessee exclusivity case law reviewed'). Confirmed real and genuinely construction-specific -- Tennessee is one of relatively few states with a mandatory coverage rule for construction employers regardless of size, distinct from its general five-employee threshold.