Is workers' comp required in Texas?

No, Texas is the only state where workers' compensation insurance is not mandatory for most private employers. However, it is required for any business that contracts with government entities. Many businesses still choose to purchase workers' compensation insurance in Texas to protect themselves from lawsuits and to cover medical expenses and lost wages for injured employees.

What are Texas's commercial auto insurance minimums?

In Texas, all commercial auto policies are required to have a minimum liability coverage of 30/60/25. This translates to $30,000 in bodily injury liability for each person injured in an accident, $60,000 in total bodily injury liability per accident, and $25,000 in property damage liability per accident. These are the minimum requirements in Texas, and higher limits are often recommended.

How much does business insurance cost in Texas?

The cost of business insurance in Texas can vary widely depending on the industry, number of employees, and coverage types. On average, Texas small businesses might pay between $480 to $960 annually for general liability insurance. A Business Owner's Policy (BOP), which combines general liability and commercial property insurance, can range from $500 to $3,000 per year.

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TX — Licensed & ActiveUpdated Mar 2026

Commercial Insurance in Texas.

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Texas is one of the few states where workers' compensation is not mandatory for most private employers — but that doesn't mean you should skip it. The state's booming construction, energy, and transportation sectors create significant liability exposure. RISKX helps Texas businesses navigate the state's unique regulatory landscape and find coverage that actually fits.

Key Industries in Texas

Oil & Gas / EnergyConstruction Transportation & Trucking TechnologyAgricultureHealthcare

Workers' Compensation in Texas: Not Required (But Recommended)

Texas is a non-compulsory workers' comp state — most private employers are not required to carry it. However, going without (called being a 'non-subscriber') exposes you to direct employee lawsuits with no caps on damages. Most businesses with employees should still carry coverage.

Texas Regulatory Notes

Workers' comp is optional for most private employers, but non-subscribers lose key legal protections

Texas has no state income tax, but commercial auto insurance rates are among the highest in the nation due to traffic density and weather

Windstorm and hail coverage may require a separate policy in coastal counties (TWIA)

The Texas Department of Insurance regulates all commercial policies — rates are competitive due to a large carrier market

Workers' Comp Rate Details — Texas

Index Rate

$0.78

per $100 payroll

National Rank

#40

of 51 jurisdictions

vs. Median

28%

below national median

Required At

N/A — optional

Below Average Cost

Optional State: Texas is the only state where workers' comp is optional for most private employers. However, non-subscribers lose key legal protections and face unlimited liability in employee injury lawsuits. We strongly recommend coverage.

•ONLY STATE where workers' comp is optional for most private employers
•Employers who opt out ('non-subscribers') lose important legal protections
•Non-subscribers can be sued by injured employees with no cap on damages
•Texas Mutual Insurance Company is the state-designated carrier

Penalty for non-compliance: No penalty for not carrying WC, but non-subscribers face unlimited liability in lawsuits

Rate data: Oregon DCBS 2024 Premium Rate Ranking Study. Index rates represent the median rate per $100 of payroll across all classification codes.

Auto Insurance Minimums — Texas

Min. BI Liability

30/60

per person/accident ($K)

Min. Property Damage

$25,000

PIP Required

Yes

No-Fault State

•Higher BI minimums (30/60)
•PIP ($2,500) required unless rejected in writing

Regulatory Overview — Texas

Regulatory Body

Texas Department of Insurance

Key Facts

•Only state where workers' comp is optional for most private employers
•Non-subscribers lose key legal protections and face unlimited lawsuit liability
•Despite being optional, most large employers carry WC
•WC rates are 28% below the national median when purchased
•Higher auto BI minimums (30/60) than many states
•Second-largest state economy

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