Workers’ Compensation Insurance Texas

Workers’ Compensation Insurance in Texas: The Ultimate Guide

Workers’ compensation insurance is optional for most businesses in Texas. Most employers choose to offer Texas worker’s compensation insurance to their employees because many believe it is a comprehensive and cost-effective choice. But there are exceptions to this rule:

  • Companies with building or construction contracts with a government organization.
  • Public or educational employers.
  • Independent contractors may be required to show proof of work comp if the hiring company’s insurance does not cover them.

workers compensation texas

Is Workers’ Comp Insurance Required in Texas?

Texas is the only state in the United States that does not require workers’ compensation insurance for employers. Texas worker compensation insurance covers lost wages and medical expenses for an injured employee while doing their job. 

Texas employers who do not carry this compensation insurance coverage need to report their non-coverage status and report any work-related injuries and occupational illness to the Texas Department of Insurance, Division of Workers Compensation.

Texas employers are also required to inform their employees that they do not offer work comp insurance. In the event they missed the annual reporting, they may receive fines. Employers who do not follow the state workers’ compensation system are called non-subscribers. The state does not penalize the non-subscribers, but they are at risk for greater liability if a worker gets injured at the job site.

Workers’ compensation insurance in Texas limits employers’ accountability for occupational injuries and other work-related illnesses. Non-subscribers can receive unlimited damages and legal fees if workers bring a personal injury lawsuit against the business.

What Is Workers’ Compensation Insurance in Texas?

Texas workers’ compensation offers benefits to employees who incur injury or become sick while doing their duties. These benefits cover medical expenses, lost salaries, rehabilitation, death on the job, death-related costs for the family.

A workers’ comp insurance policy is purchased by the employers, underwritten by the insurance company, and aims to protect both the workers and the business. Other states have funds available to the public to support workers comp insurance and prevent private insurance agencies from covering workers.

Workers’ compensation policies and premiums vary from one company to another insurance company based on their business, the business’ tenor since it became operational, data about past events, previous claims, and more.

Example: Let’s say a worker slips and falls while performing a job resulting in immediate hospitalization or a doctor’s visit. Workers’ comp can help cover the employee’s hospitalization costs until they recover.

Workers’ compensation insurance can help the employers pay for medical fees needed to treat the employees for their job-related injuries and diseases. It can also cover Texas workers’ lost wages while taking their time away from work to recover after the incident.

How Much is Workers’ Comp Insurance in Texas?

Estimated rates for workers’ compensation insurance in Texas go from $0.52 per $100 in covered payroll. The cost is influenced by several factors, including:

  • Payroll
  • Location
  • Number of employees
  • Industry 
  • Coverage limits

What Does Workers’ Comp Insurance in Texas Cover?

Workers’ compensation insurance in Texas covers the following:

Accident or Injury

 If an employee is injured while doing his duty, workers’ comp insurance will cover the medical expenses.


Texas employees can get sick at work, especially when their work lets them get exposed to harmful chemicals or allergens. Workers’ comp will provide help to the ill workers.

Repetitive injury

Not all damages on the job happen in one unique incident. Some injuries can take months or years to develop. Employees can receive treatment and recover with the help of workers’ comp coverage.

Missed wages

Employees who get sick and are unable to work will still receive their wages through lost wage benefits.

Ongoing care

Compensation benefits cover ongoing care resulting from a workplace injury or illness. It includes physical therapy that is needed by the employee to recover from his or her injury.

Funeral costs

Workers’ comp coverage can help pay for the funeral costs of an employee who died while on duty.


Some occupational injuries can be so severe that employees may never be able to work again. Workers’ comp insurance in Texas provides benefits as an aid to workers for their medical expenses. It can also cover the lost wages for disabling workers.

Does Texas Require Workers’ Compensation Insurance?

In Texas, employers aren’t required to have workers’ compensation insurance. They may obtain it from any insurance company authorized to write workers comp insurance in Texas. One of the necessary costs of successfully running your business is to ensure your workers are protected and on-the-job injuries are minimized.

Proof of coverage is also important for any business owner. This proof also shows the type of injury your worker’s comp policy covers. Getting your worker’s comp insurance from a reputable insurance provider will help you provide proof easier.

How Do I Get Workers’ Compensation Insurance?

You can get workers’ compensation insurance through a private insurance company in Texas. Here are a few tips to make the process of picking Texas workers’ compensation convenient.

Fixed Your Employment Safety Standards

Industries with high-risk nature of work are expected to have a higher number of claims. But small businesses that don’t have safety standards, implement, train, and monitor activity might find it challenging to get workers’ compensation insurance. Insurance companies have standards in giving insurance to companies who care about safety.

Be a Subscriber to Avoid Expensive Lawsuits

The injured workers cannot file complaints against the employer if they are receiving workers’ compensation benefits. Civil law only allows them to sue for pain or suffering, whether they are subscribers or non-subscribers. This can increase legal defense costs and potential claims provided to the harmed parties and their beneficiaries.

Contact a Broker to Shop Workers’ Compensation Insurance for You

To obtain the best alternatives for small business insurance in Texas, brokers work with different insurance agencies. They take one application from the employer, and they do all the work, such as comparing rates and finding the most suitable for your specific industry.

Who is Required to Carry Workers’ Comp in Texas?

Even though workers’ compensation insurance is not required in Texas, it is essential protection against potential claims, especially if the business owner cannot pay for the employee’s medical fees.

Every state except Texas has worker’s comp laws that require employers to provide for their workers. However, even if it is not necessary for Texas, most business owners carry a workers’ compensation policy because of the protection and help it could provide to both employers and employees. 

Employers who choose not to have the workers’ comp insurance are required to report injuries or work-related illness to the Texas Department of Insurance. Failing to do so will make them vulnerable to lawsuits and possible fees.

Penalties for Not Having Workers’ Compensation Insurance in Texas

There are no penalties for not having worker’s comp insurance for private firms. Usually, it is optional, but it limits an employer’s liability in case an injury happened in the workplace.

An employer is responsible for providing a safe workplace to its workers and taking responsible measures to protect its employees’ health. If an employer is providing workers compensation coverage but did not comply with its specific requirements, the employer may face administrative penalties.

What If My Employer Does Not Have Workers’ Compensation Insurance in Texas?

As the only state in the US that allows employers not to carry workers’ compensation insurance, Texas considers employers who don’t participate in the program “non-subscribers.” However, according to Texas law, an injured employee can take legal action against a non-subscribing employee to seek compensation for the damages. 

Do you Need Workers’ Compensation for Independent Contractors in Texas?

Texas doesn’t require most private employers to have workers’ comp insurance. However, some contractors may require their subcontractors and independent contractors to have this policy.

Read also: Contractors Insurance in Austin, TX

Can I Choose My Own Doctor for Workers’ Comp in Texas?

Yes, you have the right to choose your own doctor unless the Texas Workers’ Compensation Commission denies this right. 

Can an Employee Be Terminated While on Workers’ Compensation in Texas?

An employer is not allowed to fire an employee who makes a claim for workers’ comp insurance in Texas. They are also not allowed to fire an employee because of a disability. 

Learning and understanding Texas workers’ compensation law is important, especially regarding the business’s safety and employees. Texas workers’ compensation insurance is essential protection for every business. 

Confused about workers’ compensation insurance in Texas or need some help getting a quote for your business? Call us or fill out a quote request form and get all the information you need fast and for free!