The Board of Claims provides general oversight of the Tennessee's programs for compensating persons damaged by the State or its employees. The Board also reviews and authorizes the purchase of insurance for the State property insurance program and the State aviation insurance program.

The Board reviews and makes recommendations to the Commissioner of Finance and Administration and the General Assembly as to the required funding level of the Risk Management Fund, the contribution required of each state agency, department and institution to achieve the required funding, the required funding for administrative costs, and appropriate levels of self-insurance. The Risk Management Fund (for state and higher education agencies) pays various types of claims, including property damage to state buildings, workers' compensation for state employees, and damages from negligence if filed against the state such as general liability, auto liability, and medical malpractice claims.