Texas · state requirements

Workers’ comp insurance in Texas

For Texas employers deciding whether to subscribe: the opt-out rule, the notices and filings both choices carry, the lawsuit exposure of going without and what a policy costs.

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What similar businesses pay

Texas small-business average: About $34 a month
Texas index rate: $0.78 per $100 of payroll
National small-business median: About $54 a month

Published benchmarks, not quotes. Your price depends on underwriting.

Cost

What workers’ comp insurance in Texas costs

About $34 a month

Texas small-business average

Insureon customer average for Texas, updated April 13, 2026

$0.78 per $100 of payroll

Texas index rate

Oregon DCBS 2024 premium rate ranking, 40th highest of 51

About $54 a month

National small-business median

Insureon median across all states, updated April 13, 2026

$1.946 per $100 of payroll

Roofing loss cost (code 5551)

TDI rate guide, July 1, 2026 NCCI loss cost before each insurer’s multiplier

Texas is one of the cheaper states to insure. Insureon reports that its Texas customers, most with fewer than five employees, pay about $34 a month or $403 a year, against a national median of $54 a month. Oregon’s 2024 premium rate ranking, which compares states on the same mix of 50 job classes, puts Texas at $0.78 per $100 of payroll, 72% of the study median, and the Texas Department of Insurance reports that rates have fallen 81% since 2003. Your own premium depends far more on what your crew does: an office pays a fraction of what a roofer pays, because the July 1, 2026 loss cost for roofing is $1.946 per $100 of payroll before the insurer adds its multiplier.

What moves your price

Your Texas class codes: TDI assigns each employee’s payroll to a classification, and Texas classes can differ from those used in other states.
Payroll in each class, since premium is charged per $100 of payroll and checked at the year-end audit.
The insurer’s loss cost multiplier, which TDI lists for each company in its rate guide.
Your experience modifier, which reflects your past losses against similar employers.
Schedule rating credits or debits for your operations, within the range each insurer has filed with TDI.
Optional deductible or retrospective rating plans, which TDI says can reduce premium for eligible employers.

Texas

What’s different in Texas

Coverage is optional for most private employers

Texas Labor Code 406.002 lets an employer choose whether to buy workers’ comp, except for public employers and where another law requires it. TDI’s 2024 biennial report found that 24% of Texas employers were non-subscribers, the lowest share since 2016, covering 13% of the state’s employees.

Non-subscribers lose their best defenses in court

Under Labor Code 406.033, a non-subscriber sued by an injured employee cannot argue that the worker was negligent, assumed the risk or was hurt by a co-worker’s negligence. The employee must still prove the employer’s negligence. With a policy, benefits are generally the employee’s exclusive remedy under Labor Code 408.001.

Both choices come with notices

Labor Code 406.005 requires every employer to tell new hires whether it carries coverage, post a notice at the workplace and tell employees within 15 days when coverage starts, ends or is canceled. Non-subscribers also file a notice of no coverage with the Division of Workers’ Compensation each year.

Penalties of up to $25,000 a day

Missing the notice or filing duties is an administrative violation under Labor Code 406.004 and 406.005. Labor Code 415.021 allows penalties of up to $25,000 per day per occurrence, with each day of noncompliance counted as a separate violation.

Public construction work requires coverage

Labor Code 406.096 requires a state or local government entity to make building and construction contractors certify in writing that every employee on the public project is covered. Each subcontractor gives the general contractor the same certificate for its own workers.

Larger non-subscribers report injuries to the state

A non-subscriber with five or more employees must report deaths, occupational diseases and injuries causing more than one day of lost time to the Division of Workers’ Compensation by the seventh day of the following month, under 28 Texas Administrative Code 160.2.

Coverage

Coverage Texas businesses need

Workers’ compensation

Pays the medical, income, burial and death benefits set by the Texas Workers’ Compensation Act, and gives you the exclusive remedy protection of Labor Code 408.001 against most injury suits by covered employees.

How workers’ compensation works →

Employer’s liability

Insureon notes that workers’ comp policies usually include employer’s liability insurance, which can help with legal costs when an employee blames you for an injury. Check the limits on the policy information page.

How workers’ compensation works →

Pay-as-you-go workers’ comp

Insureon says some Texas employers can buy pay-as-you-go coverage, which bills on actual payroll instead of an estimate. It suits businesses with seasonal staff or payroll that swings during the year.

How workers’ compensation works →

General liability

Covers injuries and property damage you cause to customers and other third parties. It is a separate policy and does not replace workers’ comp for injuries to your own employees.

How general liability works →

Rules

Texas requirements

Texas lets most private employers decide whether to buy workers’ comp, but both choices carry duties. These are the main rules; check the Texas Department of Insurance for your situation.

Requirement	Applies to	What it means
Coverage is elective	Private employers	An employer may elect to obtain coverage, except public employers and where another law requires it (Texas Labor Code 406.002).
Notice of no coverage	Employers without workers’ comp	File with the Division of Workers’ Compensation between February 1 and April 30 each year, after hiring a first employee and after ending a policy (Labor Code 406.004; TDI).
Employee notice and posting	All employers	Tell each new hire whether you have coverage and post a notice where employees see it; non-subscribers post in English, Spanish and other languages as needed (Labor Code 406.005; 28 TAC 110.101).
Notice of a coverage change	Employers that buy, end or lose a policy	Tell employees within 15 days after coverage starts or the termination or cancellation takes effect (Labor Code 406.005(d)).
Ending a policy	Employers dropping coverage	File notice with the division within 10 days of telling the insurer; termination takes effect the later of 30 days after filing or the cancellation date (Labor Code 406.007).
Injury reports	Non-subscribers with 5 or more employees	Report deaths, occupational diseases and injuries with more than one day of lost time by the 7th day of the following month (28 TAC 160.2).
Public construction contracts	Contractors and subcontractors on state or local government projects	Certify in writing that every employee on the project is covered (Labor Code 406.096).
Administrative penalties	Employers who miss these duties	Up to $25,000 per day per occurrence, with each day a separate violation (Labor Code 415.021).

Compare workers’ compensation options in Texas.

One application, quotes from several insurers, reviewed by a licensed agent. Start with your email and finish later if you need to.

Pay less

How to lower the cost

Check that each employee’s payroll sits in the right Texas class code; clerical and sales staff should not be rated as field labor.
Compare insurers on the same payroll: TDI publishes each company’s loss cost multiplier, so the same class can carry a different rate from one insurer to the next.
Ask for schedule rating credits for your safety program; TDI’s rate guide lists each insurer’s maximum credit and debit.
Use pay-as-you-go billing if your payroll is seasonal, so premium follows actual payroll rather than a high estimate.
Report injuries promptly and offer light duty to bring workers back sooner, which helps keep your experience modifier down.
An independent broker that compares options from several insurers, such as Florin, can price both a standard policy and a deductible plan for your payroll.

Before you start

What underwriters ask for

A description of each role, or your current Texas class codes
Estimated annual payroll by class, plus last year’s actual payroll
Number of full-time and part-time employees and any 1099 contractors
Three to five years of loss runs, if you have carried coverage
Your current experience modifier, if you have one
Your DWC notice of no coverage filings, if you have been a non-subscriber
Any customer or public-project contract that requires a certificate of coverage

Common questions

Workers’ comp insurance in Texas: questions

Is workers’ comp required in Texas?

Not for most private employers. Texas Labor Code 406.002 makes coverage elective except for public employers and where another law requires it, such as building or construction contracts with a state or local government entity under Labor Code 406.096.

What is a non-subscriber in Texas?

An employer that chooses not to carry workers’ comp. TDI requires non-subscribers to file a notice of no coverage, post notices for employees and, with five or more employees, report serious injuries. TDI found that 24% of Texas employers were non-subscribers in 2024.

Can an injured employee sue a Texas non-subscriber?

Yes. Under Labor Code 406.033 the employee must prove the employer was negligent, but the employer cannot defend by blaming the worker’s own negligence, assumption of risk or a co-worker. It can still argue the injury was intentional or caused by intoxication.

When is the Texas notice of no coverage due?

Between February 1 and April 30 each year, and also after you hire your first employee or end a Texas workers’ comp policy, according to TDI. When you terminate a policy, Labor Code 406.007 gives you 10 days after notifying the insurer to file.

How is Texas workers’ comp premium calculated?

TDI says insurers multiply the payroll in each class by their rate per $100 of payroll, then may apply an experience modifier and schedule rating. Each rate is the NCCI loss cost times the insurer’s multiplier: TDI’s example is roofing at 1.946 times 1.50, or $2.919 per $100 of payroll.

Do sole proprietors in Texas need workers’ comp?

Insureon notes it is not required by law for sole proprietors and other self-employed people, but clients and general contractors often ask for a certificate before you start work, and health insurance may refuse a work injury claim.

What benefits does a Texas workers’ comp policy pay?

Medical, income, burial and death benefits. Insureon reports that survivors receive 75% of the worker’s average weekly wage up to a yearly state maximum, plus burial expenses of up to $10,000.

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Sources (13)

Figures are published third-party estimates, not quotes. Coverage depends on policy terms and underwriting, and rules vary by state. Updated October 2026.