Workers’ Compensation Insurance Texas

An A-Z guide on everything you need to know before you purchase a Texas Workers' Comp Insurance Policy

In Texas, workers’ comp insurance is optional for most employers. Still, the majority of Texas employers choose to provide coverage to their employees.

Workers’ comp insurance is a win-win for a business. It helps them protect their employees by paying for any missed wages or medical bills from an injury or illness incurred on the job.

It also protects employers from the real costs of a workers’ compensation claim - even a single one which can cause irreparable financial harm to a business.

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Texas is the only state that does not require most employers to have workers' compensation coverage

Who is required?

  • Public workers
  • private employers who contract with public or government entities

Is workers’ comp insurance required in Texas? 

Texas is the only state that does not require most employers to have workers' compensation coverage. However, if you opt-out you are required to notify the Division of Workers Compensation (DWC).  

However, many employers choose to carry coverage anyway, as it offers protection against legal action in the event of an employee injury. 

Who is required to have workers’ comp insurance in Texas? 

Public workers including employees of public schools, colleges, and universities. 

Private employers who contract with public or government entities must provide workers' compensation for the employees working on the project. 

Do you need workers’ compensation coverage if you're self-employed? 

Self-employed individuals, also known as sole proprietors, are not required to obtain workers’ comp coverage.

How much is workers’ comp coverage in Texas?

Your Texas workers’ comp rate will depend on the following factors:

  • The type of business you have
  • The size of your payroll
  • Your safety record
  • Claim history

You can learn more about Texas's workers’ comp rates here.

workers comp policy cost

How can Texas small business owners save money on workers' comp?

“Why do I always seem to pay more than I expected for my workers comp insurance?” This question is asked by almost every executive I meet.” David R. Leng, author of “Stop being frustrated and overcharged year after year by your workers’ compensation program”

Small business owners can reduce their workers’ comp costs!

Here are some easy tips: 

  • Make sure your workers are classified correctly: A class code is a 4-digit code that describes your employees' job roles for insurance purposes. Using an incorrect class code can increase your premium so it’s important to get it right. There are many nuances, so getting expert help with this is worth considering
  • Ask your agent to apply dividends: This quick call can result in up to a 5% credit. The credit is usually applied post-audit if you’ve had minimal or no claims over the past year. 
  • Set up credit programs in your business. These may take up a bit more time - but they’re well worth the effort. Some of the most common credit programs are safety programs, return-to-work (RTW) programs, and drug and alcohol-free workplace programs
  • Last but not least, be vigilant about safety in your workplace. Having fewer claims means a lower Experience Modification Rate (Ex-Mod) which directly reduces your premium.

How does workers’ comp work in Texas?

Workers’ comp rates vary according to the state, as well as the size and industry of your business. When purchasing your policy, you will need to provide the insurance company with an estimate of your payroll for the year. They will use that estimate to determine your premium. 

After the policy term, typically one year, your insurance company will audit you to determine your actual payroll. They’ll refund you if you overestimated your payroll and bill you if you underestimated it. 

Keep accurate records of your payroll throughout the year! This way you’ll get back any money coming to you at audit and you’ll save yourself the headache of a big bill at audit

What does workers’ comp cover in Texas?

Workers who file a workers' comp claim in Texas can receive benefits for the following:

workers comp covers medical bills

Medical bills

Medical bills, physical therapy, prescriptions, and necessary travel expenses for any work-related injury. In order to receive benefits, the treating doctor must be on the state’s approved list. If the injury is serious, the employee may be entitled to lifetime medical benefits.

workers comp covers lost wages

Lost Wages

Compensation for lost wages due to missed work.

workers comp pays death benefits

Death Benefits

Burial and death benefits. Death benefits are split among the deceased person’s beneficiaries. The workers’ compensation benefit would also cover minimal burial expenses.

Workers' comp coverage also protects employers from legal action. This means that if an employee sues your business because of a workplace injury, the insurance will cover the legal costs of the case.

How to get workers’ comp insurance in Texas 

Employers can purchase workers’ compensation insurance from any insurance company that is licensed by the Texas Department of Insurance. Kickstand Insurance provides workers’ comp coverage throughout Texas. 

Additionally, employers may have the option to get certified by the TDI to self-insure. 

When applying for insurance, you will need to provide your industry, classification codes, and payroll rates. 

What can happen if I don’t have workers’ comp insurance in Texas? 

Since workers’ comp coverage is optional in Texas, there are no legal penalties for not having the coverage. However, an employer who doesn’t have workers’ comp insurance risks getting sued if an employee is injured on the job. 

Getting workers’ comp coverage is a smart move for your small business as it adds a layer of protection in case of employee injury or illness. The costs associated with even one workers’ comp claim can be devastating to small business.

FAQ talk bubbles


What are workers’ comp death benefits in Texas? 

According to the TDI,  a survivor’s death benefits are 75% of the deceased worker’s average weekly wage, with maximum and minimum limits determined each year by the state. 

The workers’ compensation benefit would also cover burial expenses up to $10,000 for injuries that occurred on or after Sept. 1, 2015.

What are the statutes of limitations regarding workers’ comp in TX? 

In Texas, any employee filing a workers’ comp claim must do so within one year of the date of injury.

Additionally, they must notify their employer about it within 30 days of the accident.

How do I get a workers’ comp insurance policy with Kickstand Insurance?

Start by filling out a short online form about your business. We’ll use that info to get you an estimated quote. Then, one of our experienced agents will contact you to review the quote and make sure you are getting the absolutely lowest rate possible for your business. Once the quote is finalized, you’re ready to buy the policy - often with coverage starting that day!

Why use Kickstand to
get workers' comp insurance?

Speed + Service + Experts

Document with workers’ compensation insurance quote surrounded by insurance icons

Unlike other online insta-quote systems,
here your quote is reviewed by experts

Why does it matter?

  • Avoid surprise bills at audit
  • Make sure all your employees are properly covered
  • Protect yourself from lawsuits

What do we check?

  • Business categorized correctly
  • Employees job roles
  • Special discount opportunities
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Ready to get started with Kickstand?

It’s time to get the coverage you need. Just complete our simple online form and we’ll get you a no-obligation quote and connect with one of our expert TX agents. It’s that simple!