Is Workers’ Compensation Required in Texas?

When business owners think about workplace safety, one of the first questions that comes up is whether Workers’ Compensation insurance is required. In Texas, the answer is unique: unlike most other states, Texas does not require private employers to carry Workers’ Compensation insurance. But before making a decision, business owners should understand the legal, financial, and reputational impacts of opting in or out.

While this may sound like an advantage, going without coverage and becoming a “non-subscriber”, carries risks that can outweigh the cost savings. Risks of Going Without Workers’ Comp:

• Lawsuits: Without coverage, employees can sue employers directly for workplace injuries. And Texas law prevents non-subscribers from using certain legal defenses.
  
• Financial Exposure: A single serious workplace injury can create significant medical, legal, and settlement costs.
  
• Recruitment & Retention: Many employees view workers’ compensation as a basic protection. Not offering it can impact your ability to attract and keep talent.
  
• Compliance Reporting: Employers who don’t carry workers’ comp must still file notices with the state and notify employees.
  

Why Many Texas Employers Still Choose Coverage

Even though it’s optional, many forward-thinking Texas businesses purchase Workers’ Compensation insurance because:

• It provides exclusive remedy protection, which generally limits lawsuits from injured employees.
  
• Policies include access to medical care networks and return-to-work programs that help employees recover and businesses reduce downtime.
  
• It demonstrates a culture of safety and responsibility, which strengthens employer reputation.

If you have questions about any other Business Insurance policies, please feel free to contact me. 

Jason Matison
Commercial Insurance Agent
Austin, Texas