Workers' Compensation Insurance Texas

Texas is the only state that does not require most private employers to carry workers’ compensation insurance. Employers can choose to be a “non-subscriber” and opt out, though certain government contracts and building/construction contracts may still require it.

Opting out doesn’t make you immune — it actually increases your exposure to injury lawsuits, because non-subscribers lose key legal defenses. We help Texas employers understand exactly what they’re taking on either way before they decide.

Workers’ comp covers medical treatment and a portion of lost wages for employees injured on the job, plus disability benefits for lasting impairment and death benefits for an employee’s family. In exchange, it generally shields the employer from most injury-related lawsuits.

It does not cover injuries to non-employees or general business liability — those fall under general liability. At Rafail Insurance Agency we make sure comp is coordinated with your other coverages so there are no gaps between them.

A subscriber is a Texas employer who carries workers’ compensation insurance; a non-subscriber is one who opts out. Subscribers receive strong protection from employee injury lawsuits and provide defined benefits to injured workers; non-subscribers keep the premium but take on far greater legal risk.

Non-subscribers can be sued for negligence with no statutory cap on damages and lose several common-law defenses. We lay out the real consequences of each path so you can choose based on facts, not assumptions.

As a non-subscriber, you’re responsible for the injured employee’s medical bills and lost wages, and you can be sued for negligence without the damage caps and defenses that protect subscribers. A single serious injury can result in a judgment large enough to threaten the business.

That open-ended exposure is the core reason most growing employers subscribe. We’ll quantify the risk for your situation so the decision reflects what’s actually at stake.

Premium is based primarily on your payroll, the classification codes for the work your employees do, and your experience modifier — a factor reflecting your claims history versus similar businesses. Higher-risk job classes and a higher mod both raise the premium.

Misclassified payroll and an inaccurate mod are common and costly errors. We review both so you’re not overpaying, and so a drifting mod isn’t quietly inflating every bid you submit.

The experience modifier is a number that compares your workers’ comp claims history to other businesses of your type. A mod above 1.0 raises your premium; below 1.0 lowers it. Because it reflects past claims, it can follow you for years and affects your competitiveness on bids.

We help ensure your mod is accurate and your safety record is reflected correctly, and we flag opportunities to bring it down over time. An accurate mod is one of the most direct ways to control comp cost.

Generally, workers’ comp covers W-2 employees, not true independent contractors — but misclassification is a frequent and risky mistake, and many clients require subs to carry their own coverage. If a worker is found to be an employee, you could be liable without coverage.

We’ll help you understand how your workforce is classified and what your contracts require, so you carry the right coverage for the people who actually work for you. Where the classification is genuinely unclear, we’ll suggest confirming it with the appropriate professional.

It’s free and carries no obligation. Share your payroll, class codes, and current policy through our contact or appointment form, and we’ll review your classifications and experience mod, then shop A-rated carriers and explain your options in plain language.

If your coverage and classifications are right, we’ll tell you so. If we find a misclassification or a better fit, we’ll show you the impact on your premium — and the decision stays yours.