Workers’ Compensation Insurance in Texas

How Is Workers’ Compensation Insurance Defined in Texas?

The state of Texas defines workers’ compensation as a state-regulated insurance program that pays medical bills and replaces some lost wages for employees who experience a workplace injury or illnesses. Lost wages benefits are offered when an on-the-job injury or illness causes the worker to lose some or all income for more than seven days.

What Are the Laws Regarding Workers’ Compensation Coverage in Texas? 

Unlike most states, Texas does not legally require most businesses to provide workers’ compensation coverage for their employees. Most Texas employers have the option to choose whether or not to maintain workers’ compensation insurance coverage. However, some industries, such as public and government employers, state universities, public construction, public transportation, gas dealers, and employers of inmates in furlough work programs must have coverage. 


Although workers’ comp is not legally required for most Texas businesses, it is usually in the best interest of employers to have workers’ comp coverage. This is because without coverage, business owners do not have protection against being held liable for expenses related to the workplace injury or illness. Without workers’ compensation insurance, if an employee gets injured or sick while working, business owners could be sued and potentially held responsible for paying the employee’s medical expenses, lost wages, and more. 

What Does Workers’ Compensation Insurance Cover in Texas?

In Texas, workers’ compensation provides the following benefits

  • Medical benefits: Emergency and lifetime coverage for medical care that is considered reasonable and necessary for treatment of a workplace injury or illness
  • Lost income benefits: Temporary, impairment, and supplemental income benefits, including lifetime benefits for permanent injuries 
  • Death benefits: Coverage for funeral/burial expenses and lost income. 

What Are the Penalties in Texas for Not Having Workers’ Comp Insurance Coverage?

Texas does not legally require most employers to have workers’ compensation insurance. Therefore, there are no penalties for not having workers’ comp coverage for most employers. However, employers who elect not to have coverage must notify the Division of Workers’ Compensation (DWC) in writing that they choose not to maintain coverage. 

Despite there not being legal penalties for not having workers’ comp coverage, Texas employers should understand the risks associated with not maintaining this coverage for their employees. Not having coverage opens employers to liabilities in the event a workplace injury or illness occurs. 

Learn more about workers’ comp coverage requirements in states other than Texas here

What Types of Injuries Are Covered by Texas Workers’ Comp?

Texas law states that workers’ compensation will pay for medical treatment of injuries and illnesses so long as: 

  • The injury occurred at work or the illness is deemed job related
  • The worker’s employer has workers’ compensation insurance or is certified by the Texas Department of Insurance, Division of Workers’ Compensation to self-insure

For more information about the workers’ comp claim process, visit our learning center

What Are Workers’ Comp Death Benefits in Texas?

In the event that an employee who is covered by workers’ comp insurance passes away due to an on-the-job injury or illness, the worker’s surviving dependents can receive death benefits. Death benefits typically amount to 75% of the worker’s average weekly wage, up to the maximum amount that is determined by the state annually, and are split between the worker’s surviving dependents. 

The state of Texas considers the following eligible for death benefits: 

  • Spouse
  • Children under 18
  • Children under 25 who are full-time students
  • Children of any age who were dependent on the worker at the time of their passing
  • Grandchildren who were at least 20% dependent on the worker at the time of their passing, provided that the grandchild’s parent is not eligible for death benefits
  • Other family members who were reliant on the worker at the time of their passing for financial support, if none of the above dependents are applicable

In addition, workers’ comp death benefits in Texas cover burial and funeral expenses up to $10,000.

How Do Workers’ Comp Settlements Work in Texas? 

As in other states, workers’ comp settlements in Texas are mutually beneficial agreements made between the injured worker, their employer, and the insurance company. Settlements usually result in the employee being paid an agreed-upon amount of compensation in structured payments. In exchange, the worker agrees not to pursue additional benefits or civil litigation in relation to the claim in the future, and the claim is closed permanently.

What Is the Statute of Limitations Regarding Workers’ Comp in Texas? 

In Texas, employees must file their workers’ comp claim within one year of the date of the injury or discovery of the illness. In addition, employees must notify their employers of their injury or illness within 30 days.

How Much Does Workers’ Compensation Insurance Cost in Texas?

As in other states, the cost of workers’ comp insurance premiums in Texas will vary depending on a variety of circumstances. Private insurers are allowed to set their own rates. Premiums are often determined using several factors that are unique to each business. 

If you’re a Texas business owner looking for coverage, the best way to tell how much you’ll pay is to compare quotes from multiple insurance providers. Every business’s premiums will be different depending on circumstances unique to each business. For example, if your business is considered low-risk, like accounting, your rates might be lower than those of businesses that are considered high-risk, like oil and gas. 

Many factors unique to your business will be utilized to determine your exact insurance premiums. 

Insurance rates, or premiums, depend upon a variety of factors unique to the business, including: 

Some of these factors include: 

  • The location of your business
  • The size of your business and the number of employees 
  • The industry in which your business operates

For business owners who are hoping to lower their insurance premiums, there are some preventative steps that might help. Insurance providers often consider how seriously businesses take workplace safety when calculating workers’ comp premium rates. Taking simple steps such as enacting employee training sessions, following industry best practices, and creating safety protocols could potentially help lower your insurance premiums. 

How Do I Get Workers’ Comp for My Texas Business?

Texas business owners seeking workers’ comp coverage can choose to purchase an insurance policy from any commercial insurance company, agent, or broker that is licensed to operate in the state. In addition, businesses that meet the requirements of the Texas Workers’ Compensation Act and are certified by the Texas Department of Insurance, Department of Workers’ Compensation can self-insure. 

Although self-insured employers receive the same rights as employers who choose to purchase private policies, the costs associated with this responsibility is high in the event of an incident. With self-insurance, businesses must pay for all costs associated with workplace injuries or illnesses without the assistance of insurance. This is too costly for most businesses. 

Luckily, getting workers’ comp insurance coverage in Texas can be easy with the right private insurance provider. Cerity created a faster, more affordable way to get workers’ comp. We help Texas business owners just like you get insurance premium quotes fast — without the hassle of phone calls or paperwork. Using proprietary tools and modern technology, we provide business owners with quick quotes and instant policies. 

Visit our free online quote tool and see how easy it is to protect your Texas business today.

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