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Texas is unique among states in that most private employers are not legally required to carry workers compensation insurance. But not required does not mean not recommended. The decision to go without workers comp carries significant legal and financial risk that every Texas business owner should understand.

What Is Workers Compensation Insurance?

Workers compensation is an insurance policy that covers medical expenses and lost wages for employees who are injured or become ill on the job. In exchange for providing this coverage, employers receive protection from most employee lawsuits related to workplace injuries.

Texas: The Only State Where It Is Optional

Every other state in the U.S. requires most employers to carry workers comp. Texas is the only exception. If you choose not to carry workers comp, you are considered a non-subscriber. However, if you have contracts with government entities, workers comp is typically required. Many general contractors also require subcontractors to carry it.

The Risks of Going Without Workers Comp

If you are a non-subscriber and an employee is injured on the job, that employee can sue your business directly. As a non-subscriber, you lose several key legal defenses. You cannot argue that the employee's own negligence contributed to the injury, that a coworker caused the accident, or that the employee assumed the risk of the job. A single serious workplace injury can result in a lawsuit that threatens the financial survival of your business. Workers comp premiums are a known, manageable cost. A lawsuit judgment is not.

Who Should Carry Workers Comp in Texas?

We recommend workers comp for most Texas employers, especially businesses with employees performing physical labor, companies that work with general contractors or government entities, employers with more than a few employees, and any business that cannot financially absorb a major injury lawsuit.

How TAP Insurance Can Help

As an independent agency, we work with multiple workers comp carriers to find the right policy for your business. We understand the nuances of Texas workers comp, from classification codes to experience modification rates, and can help you find coverage that protects your business without overpaying.

Wondering whether your Texas business needs workers comp? Contact TAP Insurance Agency at (800) 666-2254 for a free consultation and quote.