Texas Workers' Compensation Insurance
Everything you need to know about workers' comp in Texas: when it's required, who's exempt, average rates, and how to get coverage in 60 seconds.
When is workers' comp required in Texas?
OPTIONAL — Texas is the only state where private employers are NOT required to carry workers' comp.
Sole proprietor & partnership rules
Optional for sole proprietors.
Owner / corporate officer exclusion
Officers may be excluded if employer chooses to carry coverage.
Texas-specific notes
Texas is unique — workers' comp is optional. Employers who don't carry coverage are 'nonsubscribers' and lose key legal defenses (negligence, contributory negligence, fellow employee). Most large employers and any with contracts requiring proof of insurance carry it anyway.
How much does workers' comp cost in Texas?
The average workers' comp rate in Texas is approximately $1.04 per $100 of payroll. Your actual rate depends on your industry class code, claims history, payroll size, and carrier.
Example: a Texas business with $100,000 in payroll at the state average rate would pay approximately $1,040 per year. A clerical-only business (class code 8810) would pay much less; a roofing contractor (5551) would pay much more.
Want an exact rate for your business?
Class code rates vary widely. Get a free quote and we'll look up your exact Texas rate for your industry.
Get My Texas Quote →Texas workers' comp by industry
Industry-specific rates, common class codes, and requirements for Texas businesses:
Frequently asked — Texas workers' comp
Do I need workers' comp if I have only one employee in Texas?
Yes — Texas requires workers' comp coverage starting with one employee.
Are 1099 contractors covered under my Texas workers' comp policy?
Generally no — true independent contractors are not employees and not covered. However, Texas (like most states) applies an "ABC test" or similar to determine if a 1099 worker is actually a misclassified employee. If they're misclassified, you may owe back premium and penalties. Many general contractors require their 1099 subs to carry their own workers' comp.
Can I get pay-as-you-go workers' comp in Texas?
Yes — most major carriers offer pay-as-you-go workers' comp in Texas, with premium based on actual payroll each pay period instead of a large upfront deposit.
What if I'm being audited by my Texas workers' comp carrier?
Workers' comp audits often result in additional premium owed because of misclassified employees, missed payroll, or wrong class codes. We offer free audit reviews and can dispute incorrect classifications with your carrier. In many cases we save clients thousands.