Workers' Comp Isn't Required in Texas. Here's Why You Need It Anyway
- Kevin Bui
- Oct 5
- 3 min read
Here in Texas, we value freedom and independence. That spirit extends to how we do business, and one of the most unique aspects of our state's law is that most private employers aren't legally required to carry workers' compensation insurance.
On the surface, this might seem like a great way to save money. But choosing to "go bare" is one of the biggest gambles a business owner in Plano, or anywhere in Texas, can take. The premium you save today could be dwarfed by a single workplace accident that costs you your entire business tomorrow.
Before you decide to opt-out, you need to understand what you're truly giving up.
The Myth of "Saving Money"
The number one reason business owners skip workers' comp is to lower their expenses. But this view is dangerously short-sighted. Without workers' compensation, you are personally shouldering 100% of the financial risk for any employee injury. This doesn't just mean paying for a doctor's visit; it means exposing your business to devastating lawsuits and unlimited liability.
The Three Massive Risks of Not Having Workers' Comp in Texas
1. You Lose Your Strongest Legal Defenses
This is the most critical point every Texas business owner needs to understand. The Texas Workers' Compensation Act creates a powerful trade-off. When you provide workers' comp coverage, an injured employee's benefits are generally limited to medical care and partial wage replacement. In return, they cannot sue you for their injuries. This is called "exclusive remedy," and it is your ironclad shield against lawsuits.
When you opt-out of workers' comp, that shield vanishes. An injured employee can, and often will, sue your business in a personal injury lawsuit.1 To make matters worse, the law strips you of your three most powerful common-law defenses:
You cannot argue the employee was at fault. Even if your employee was texting, ignored safety rules, and was 99% responsible for their own injury, you can be found 100% liable for the damages.
You cannot argue the employee knew the job was risky. The "assumption of risk" defense is not available.
You cannot argue that a coworker caused the injury. The "fellow servant" doctrine is also removed.
Imagine an employee trips over a box and breaks their arm. Without workers' comp, you can't argue that they should have been watching where they were going. You are likely on the hook for the entire cost.
2. You Face Unlimited Financial Liability
A workers' compensation claim has defined and predictable limits.2 A lawsuit does not. If you are sued by an employee, a jury can award damages for:
All medical bills (past and future)
100% of lost wages (past and future)
Pain and suffering
Mental anguish
Disfigurement
A single back injury can easily result in a seven-figure verdict for medical care, lost earning capacity, and pain and suffering. This kind of judgment can bankrupt a business and even put your personal assets at risk.
3. You Suffer Competitive Disadvantages
The risks go beyond the courtroom.
Losing Contracts: Many general contractors and corporations will not do business with subcontractors or vendors who don't carry workers' compensation. By going bare, you could be locking yourself out of major opportunities.
Losing Talent: In a competitive job market like the one here in the Plano area, savvy employees know the difference. The best talent will often choose an employer who provides the security of workers' comp over one who doesn't.
Damaging Morale: Providing coverage shows you care about your team's well-being.3 It builds loyalty and demonstrates that you run a stable, professional operation.
The Real Benefit: Peace of Mind and Financial Security
Workers' compensation isn't just another expense. It's a critical tool for risk management. For a predictable premium, you get:
Protection from devastating lawsuits.
Coverage for employee medical bills and lost wages.
A proven system to help employees recover and return to work.
The credibility you need to win contracts and attract great employees.
In Texas, the decision to carry workers' compensation is a choice. But it's a choice between a manageable, predictable cost and a potentially catastrophic, business-ending gamble. Don't risk everything you've worked so hard to build.
Let's talk about how affordable true peace of mind can be. Contact us today for a no-obligation workers' compensation quote and a full review of your business risks.
(972) 247-2838
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