Should You Enroll in Texas Workers' Compensation Insurance?

Texas is the only state in the U.S. where enrolling in workers' compensation is optional.

In most states, if you have even one employee, enrollment is mandatory, but in Texas, employers have the choice. However, not enrolling can lead to serious issues if an accident occurs.

When is Workers' Compensation Mandatory in Texas?

Most private businesses have the option, but certain industries are required to enroll.

✅ Government contract-related businesses – Companies contracting with the Texas state government
✅ Construction – If participating in government construction projects
✅ Transportation – Some transportation companies are required to enroll
✅ Oil and gas industry – Some are required due to hazardous working conditions

Other general businesses can choose whether to enroll.

What Risks Are There If You Don't Enroll?

If you do not enroll in workers' compensation, the employer must bear all costs directly in the event of an accident.

• Full coverage of medical expenses if an employee is injured or contracts an occupational disease
• Compensation for lost wages must also be handled directly by the employer
• Higher likelihood of employees suing the employer
• Potential for business closure or significant damages if mishandled

Especially, the lack of legal protection is the biggest risk.

• Generally, when enrolled in workers' compensation, employees cannot sue the company in exchange for compensation
• However, businesses that are not enrolled can be directly sued by employees

In other words, to reduce the risk of lawsuits, enrolling is a safe choice.

What Benefits Are There If You Enroll?

✅ Coverage for employee injury and illness medical expenses
✅ Compensation for lost wages due to work-related injuries
✅ Disability and death benefits
✅ Reduced risk of being sued by employers

How to Enroll?

To enroll in workers' compensation in Texas, you need to register with the Texas Department of Insurance, Division of Workers' Compensation (DWC).

• Enrollment is possible through private insurers
• Annual renewal is required after enrollment

If an employer decides not to enroll, they must submit a Non-Subscriber Notice to the Texas Division of Workers' Compensation.

Enrolling is a Safe Choice

✅ In Texas, enrolling in workers' compensation is not mandatory, but the risks are high if an accident occurs
✅ If not enrolled, employees are more likely to sue the employer directly
✅ To reduce lawsuit risks and gain legal protection, enrolling is the safe option

While it is optional in Texas, enrolling is the best way to protect both employees and the company.