Texas Workers' Comp Requirements

Most private Texas employers can choose whether to carry workers' compensation insurance. Texas has no ordinary employee-count threshold that forces a private business to buy a policy. Four things override that choice: you are a Texas governmental entity; you are working on a building or construction project for one; a client contract requires coverage; or your trade license requires coverage or a documented election. If none of those applies and you go without coverage, you are a nonsubscriber — which is a legal status with employee-notice, state-filing, and injury-reporting duties, not an absence of one. The governing authority is the Texas Department of Insurance, Division of Workers' Compensation (DWC).

So the real Texas question is never "is workers' comp optional?" It is: which employer type, project, license, worker facts, coverage status, and current DWC rule apply to you? This page answers that with a verified requirement matrix, the nonsubscriber duty timeline, and the official verification path. Two points shape everything below. On a governmental construction project the statute requires the contractor to certify coverage for each of its employees, while DWC's rule reaches every person providing project services regardless of who employs them. And a certificate of insurance is only evidence of a policy that already exists, never a substitute for one.

Scope. This page covers Texas workers' compensation requirements for small trade and service businesses — construction and building trades, remodelers and specialty subcontractors, and service operators such as cleaning, landscaping, and handyman businesses. It covers what the law, your license, and your contracts require of you, what you must file, and what you give up by going without coverage. It does not cover class codes, premium, or carrier selection; those live on the workers' comp insurance hub.

Here is the short triage. Each branch is an option to quote or verify — never a promise of coverage or eligibility.

• If you are a Texas governmental entity, or you will work or provide services on a building or construction project for one — treat coverage as effectively required, and plan the policy or another authorized coverage route before work begins.
• If you are a private employer choosing to operate without coverage — plan for nonsubscriber duties: posted and written employee notices, DWC filings, and event-based injury reporting.
• If a client, landlord, project contract, or trade license requires coverage or a documented election — quote it, or document the election. A contract can demand more than the state baseline, and the contract controls.
• If owners, contractors, multi-state workers, or an unclear entity type leave your governing gate unresolved — confirm the requirement first. Start at the Texas DWC employer resources page before relying on any summary, including this one.

Three things not to get wrong, whichever branch you are on:

1. A certificate is not coverage. It summarizes a policy that already exists. There is no legitimate way to produce proof without a policy behind it.
2. Going without coverage costs you three legal defenses. Under Labor Code §406.033, an employer sued by an injured employee who is not covered cannot argue contributory negligence, assumption of risk, or fellow-employee negligence — and a pre-injury waiver signed at hire is void. One narrow exception and one post-injury rule are in what a nonsubscriber gives up.
3. A gap counts — and it may start later than you think. If your policy ends and nothing replaces it you become a nonsubscriber, but the date is set by rule, not by the policy: an employer-initiated termination takes effect on the later of the 30th day after DWC receives your notice or the policy cancellation date, and coverage runs — with premium owed — until then (28 TAC §110.105(c)–(d)).

On this page:

• Check these six facts before relying on "optional"
• Who must carry workers' comp in Texas?
• What a Texas nonsubscriber must do
• What changes if the employer carries coverage?
• What workers' comp does not cover
• Employees, owners, contractors, and out-of-state work
• Government projects, client contracts, and proof
• Collecting sub certificates and surviving the audit
• How these rows were verified
• How to verify the current rule and take the next step
• Before you quote workers' comp: what to confirm for your situation
• Frequently asked questions

Check these six facts before relying on "optional"

Gate design based on current Texas DWC employer resources; sources verified 2026-07-20, rechecked 2026-07-25, statutes and rules verified 2026-08-08.

"Optional in Texas" is only the baseline for most private employers. Before you rely on it — or on anyone's summary of it — pin down these six facts. Each one can change your answer.

#	Fact to confirm	Why it changes the answer
1	Employer type — ordinary private business, or a Texas governmental entity?	Governmental entities are required to have coverage; the private-employer choice does not apply to them.
2	Texas-based workers — do you have one or more Texas employees who are not exempt from coverage under the Act?	Nonsubscriber filing duties attach to employers with non-exempt employees. Labor Code §406.091(a) sets the exempt categories: domestic workers and casual workers in employment incidental to a personal residence, persons covered by a federal compensation method, and — except as Subchapter H provides (§406.162) — farm and ranch employees. The Act's employer definition (§406.001) reaches a person who employs one or more employees, so a genuine one-person business has no employees to cover — which still does not answer whether a contract, a governmental project, a license condition, or your own owner-coverage election applies.
3	Project or contract — is any work on a building or construction project for a governmental entity, or governed by a client contract that requires coverage?	The government-project rule and private contract terms can require coverage and proof the baseline law does not.
4	Worker and entity status — owners, officers, members, contractors, staffing arrangements, multi-state workers?	Texas answers some of these by statute and leaves others to the facts. A label or 1099 form never decides them on its own. See worker boundaries.
5	Current coverage route — an in-force policy from a licensed carrier, TDI-certified self-insurance or group self-insurance, or no Texas workers' comp coverage at all?	Each route carries different notices and reporting. Certified self-insurance is an authorized coverage route; it is not the same as being a nonsubscriber.
6	A triggering event — first hire, policy termination, the annual filing window, a work-related injury, illness, or death, a license application or renewal, or a request for proof?	Events start filing and reporting clocks, on specific forms with specific deadlines.

Work the card top to bottom and don't stop at the first comfortable answer — the facts compound. A private cleaning company with two employees looks like row 1 until a school district remodel puts it in row 3. No single fact is a universal answer, and two of them (worker status and local overlays) may not be answerable from any page at all.

First action: find your row in the matrix below, open the official DWC source cited in that row, confirm the current form or rule, and record the date you checked it — before you file anything, buy anything, or rely on an exemption.

Who must carry workers' comp in Texas?

Row sources: Texas Labor Code Chapters 406, 411, and 504; 28 TAC Chapters 110 and 160; TDI employer resources (page last updated 2026-06-08); DWC Employer E-File pages and application; DWC Form-020SI (Rev. 08/24); DWC Notice 8 (Rev. 12/15). Verified 2026-07-20, rechecked 2026-07-25, statute and rule text verified 2026-08-08. The status vocabulary used in the last column is defined in how these rows were verified.

The matrix below is the page's primary answer. Find the row that matches your employer type and status; the surrounding sections interpret the rows rather than repeating them. Every row's limits are set out by row ID in what each status does not do — read your row in both places before you act on it.

Employer / status	Texas baseline rule	Trigger → required action	Form / official source	As-of & status
Ordinary private employer (TX-WC-PRIVATE) · all trades with Texas employees	Coverage is elective. Labor Code §406.002: except for public employers and as otherwise provided by law, an employer may elect to obtain coverage.	Choosing either way → confirm no governmental-entity, project, contract, or license gate applies, then follow the subscriber or nonsubscriber duties below.	§406.002; TDI employer resources	2026-08-08 · Verified
Texas governmental entity (TX-WC-GOV) · not trade-specific	No private-employer election. Labor Code Ch. 504 applies the compensation provisions to political subdivisions; §504.011 sets three coverage methods — self-insurance, a policy, or an interlocal agreement. §504.001(3) defines political subdivision to include a county, municipality, special district, school district, junior college district, and housing authority.	Operating as a governmental entity → confirm and document the coverage method with DWC.	§§504.001, 504.011, 504.018; DWC Form-020SI — filed through TXCOMP, not Employer E-File	2026-08-08 · Verified with limitation — Ch. 501 covers state employees and Ch. 505 covers TxDOT; confirm which chapter governs your entity.
Building or construction project for a governmental entity (TX-WC-PUBLIC-PROJECT) · building and construction trades	Two levels. §406.096(a)–(b): the governmental entity requires the contractor to certify in writing that it covers each of its employees on the public project, and each subcontractor certifies coverage of its own employees through the general contractor. 28 TAC §110.110(a)(7) then extends the requirement to every person providing project services, regardless of who employs them and regardless of whether they have employees.	Bidding or working on the project → coverage in place for the project's duration; the contractor posts the prescribed notice on each project site and runs the certificate chain in collecting sub certificates.	§406.096; 28 TAC §110.110; DWC Notice 8 (Rev. 12/15)	2026-08-08 · Verified with limitation — the rule's reach for non-construction service trades turns on a residual phrase; see which trades fall inside. The actual project contract controls specifics.
Subscriber — employer with a policy or TDI-certified self-insurance (TX-WC-SUBSCRIBER) · all trades	An authorized coverage route: a policy from a licensed carrier, TDI-certified self-insurance, or a certified self-insurance group under Labor Code Ch. 407A.	Coverage in force → post and give the prescribed coverage notices; report qualifying injuries, illnesses, and deaths to the carrier.	Employer forms and notices; Employer FAQ	2026-08-08 · Verified with limitation — use the notice set for your specific coverage route.
Nonsubscriber — private employer without coverage (TX-WC-NONSUBSCRIBER) · all trades with Texas employees	A private employer that chooses not to provide coverage — or whose policy ends — is a nonsubscriber, with notice, filing, and reporting duties, and without the common-law defenses at §406.033. The statutory duty to notify DWC is at §406.004 and, on termination, §406.007.	See the nonsubscriber duty timeline.	DWC nonsubscriber page; DWC Form-005 (Rev. 01/25); 28 TAC §§110.101, 110.103, 110.105	2026-08-08 · Verified — employee-exemption categories under §406.091(a) still require case-by-case review.
Private contract or client proof request (TX-WC-CONTRACT) · all trades working under written contracts	A contract may require coverage, limits, endorsements, or proof even when the state baseline does not. Contract terms are not law and are negotiable.	Contract or proof request received → the actual current document controls; see contracts and proof.	Your actual contract, plus your carrier or authorized producer	2026-07-20 · Partial — cannot be verified beyond your specific document.
Licensed trade with its own coverage condition (TX-WC-LICENSE) · TDLR-regulated trades, including electrical	Some Texas trade licenses require the applicant to maintain workers' compensation coverage or to state that it has elected not to obtain coverage under Subchapter A, Chapter 406. Occupations Code §1305.159(a)(3) does this for electrical contractors.	License application or renewal → produce proof of coverage, a certificate of authority to self-insure, or the documented election.	§1305.159; TDLR electrical contractor application page	2026-08-08 · Verified with limitation — verified for the TDLR electrical programs; other licensed trades set their own conditions and are not verified here.
Owners, officers, contractors, staffing (TX-WC-CLASSIFICATION) · varies by trade — sole operators and sub-heavy crews most affected	Partly settled by statute, partly fact-specific. §406.097 governs sole proprietors, partners, and corporate executive officers. §§406.121–406.123 govern general contractors, subcontractors, and independent contractors. Staffing and leasing arrangements, multi-state splits, and contested status remain fact questions.	Any of these present → read worker boundaries, then take your actual facts to DWC or an attorney.	§406.097; §§406.121–406.123; DWC Form-085	2026-08-08 · Verified with limitation — the statutory rules are published here; applying them to a specific worker is not this page's call.
City, county, or court overlay (TX-WC-LOCAL) · all trades working under local procurement rules	No universal local overlay is assumed — and none is ruled out.	Local project, procurement rule, or court requirement in play → verify that specific source.	The specific local authority or contract	2026-07-20 · Blocked — not yet researched; a defined local project or rule triggers review, and absence is never assumed.

Filing-route note. DWC-005 and DWC-007 file through Employer E-File; Form-020SI files through TXCOMP. The current DWC-005 and DWC-007 instructions also reference creating a TXCOMP profile and uploading documents, while TDI's online-filing options page directs DWC-005 and DWC-007 to Employer E-File. We follow the filing-options page and flag the divergence — if the two disagree the day you file, call DWC at 800-252-7031 and use the route they confirm.

Licensing note. The license row above is verified for one program, not for the trades generally. TDLR's electrical contractor, electrical sign contractor, and residential appliance installation contractor licenses each carry the same workers' compensation condition (Occupations Code §§1305.159, 1305.160, 1305.161), and TDLR's application page states that an applicant electing no coverage must file the no-coverage notice with DWC. Whether your own trade's license carries a comparable condition is a question for that licensing program, not for this page. Verified 2026-08-08.

Which trades fall inside the government-project rule?

Sources: Labor Code §406.096(d)–(e); 28 TAC §110.110(a)(7), (h), (i). Verified 2026-08-08. This table sorts activities against the rule; it does not decide any specific bid.

§406.096(e)(1) defines "building or construction" by activity, not by trade name — erecting or preparing to erect a structure, remodeling, extending, repairing or demolishing a structure, or otherwise improving real property through similar activities — and 28 TAC §110.110(a)(2) adopts that definition. Here is how the common trade activities sort against it.

Trade or activity	Position relative to the government-project rule	Deciding authority
Framing, roofing, electrical, plumbing, HVAC, concrete, masonry, painting	Inside on a normal reading — erecting, remodeling, repairing, or improving a structure	§406.096(e)(1)
Demolition and site work	Inside — named activity categories	§406.096(e)(1)
Hauling, delivery, and transportation related to the project	Inside — "services" reaches providing, hauling, or delivering equipment or materials and providing labor or transportation for the project	28 TAC §110.110(a)(7)
Landscaping, cleaning, or similar service work performed as part of the construction contract	Margin — genuinely open. Turns on the statute's residual "similar activities" phrase, which is ambiguous for work that is not construction	§406.096(e)(1); the bid documents and the entity's contract administrator
Maintenance work by an employer whose primary business is not building or construction	Likely outside — the statute says employing a maintenance employee in that situation does not constitute engaging in building or construction	§406.096(d)
Food and beverage vendors, office-supply deliveries, portable-toilet delivery	Outside — activities unrelated to the project	28 TAC §110.110(a)(7)
Registered motor carriers meeting the rule's conditions	Outside by rule — but the exclusion's predicate statute has been repealed and recodified; see the source note below	28 TAC §110.110(h)
Sole proprietors, partners, and corporate officers properly excluded from coverage	Outside by rule — for policies delivered, issued for delivery, or renewed on or after 1996-01-01	28 TAC §110.110(i), applying §406.097

Source note — superseded authority. §110.110(h) conditions the motor-carrier exclusion on registration under Tex. Civ. Stat. art. 6675c, a statute that has since been repealed and recodified, with motor-carrier registration no longer administered by the agency the rule names. Status: Superseded underlying authority. Do not rely on this exclusion without confirming its current application with DWC.

If your trade sits at the margin, get the entity's contract administrator to put its position in writing before you mobilize. That is cheaper than arguing it afterward.

What each status does not do

Every row above carries a limit. A status answers one question and leaves the others open.

Row	What this status does not do
TX-WC-PRIVATE	Does not remove a contract, project, or governmental-entity requirement, and does not make injury cost disappear — it relocates it.
TX-WC-GOV	Does not decide the coverage method. Which of §504.011's three routes you use is a separate determination, reported on Form-020SI.
TX-WC-PUBLIC-PROJECT	Does not reach services unrelated to the project (28 TAC §110.110(a)(7)), does not reach motor carriers covered by §110.110(h), and does not reach sole proprietors, partners, and corporate officers properly excluded under §406.097 per §110.110(i).
TX-WC-SUBSCRIBER	Does not cover the owner, partners, or officers unless owner coverage is elected and accepted; does not cover injuries to non-employees or damage to property; does not follow your crew into another state's mandatory system.
TX-WC-NONSUBSCRIBER	Does not eliminate injury cost — it moves it to you, without the §406.033 common-law defenses and without exclusive-remedy protection. Does not remove DWC filing and notice duties.
TX-WC-CONTRACT	Does not create coverage. The policy and its endorsements create coverage; the contract only obliges you to buy it.
TX-WC-LICENSE	Does not turn the Texas election into a mandate. It requires you to document which way you elected — carrying coverage and electing not to are both compliant answers to the license, with different duties attached.
TX-WC-CLASSIFICATION	Does not resolve any individual worker's status. The statutes named set the framework; your facts decide the outcome.
TX-WC-LOCAL	Not applicable — not researched. A blank here is not a finding of "no requirement."

Read the matrix as a routing table. The first row is the famous one: Texas, uniquely, lets most private employers decide. The next two rows are why that sentence is dangerous on its own — the moment a governmental entity or one of its building or construction projects enters the picture, the choice narrows sharply, and coverage attaches to the people on the project, not just to whoever signed the prime contract. The last four rows are where confident generalizations go to die: contracts, licenses, classifications, and local overlays are resolved by documents and facts, not by a state-level page.

One row rewards a closer look before you move on. The subscriber row spans three distinct authorized routes — a licensed carrier's policy, individual TDI-certified self-insurance, and a certified self-insurance group — that share the "covered employer" label but differ in notices, reporting mechanics, and who stands behind the benefits.

What a Texas nonsubscriber must do

Sources: DWC nonsubscriber page, DWC Form-005 (Rev. 01/25) and its instructions, TDI Employer FAQ, DWC Form-007 (Rev. 01/25); Labor Code §§406.004, 406.005, 406.007, 406.091, 411.032, 415.021; 28 TAC §§110.101, 110.103, 110.105 and §160.2. Verified 2026-07-20, rechecked 2026-07-25 and 2026-08-08. Where a form's instructions and the governing rule differ, the rule is used and the divergence is named.

A Texas nonsubscriber is a private employer that chooses not to provide workers' compensation coverage — including an employer whose policy terminates. "No coverage" does not mean "no duties." The duties arrive as triggered events on three separate tracks: what you file with DWC, what you give and post for your employees, and what you report when someone is hurt. Missing any one of them is a violation on its own.

Track one — what you file with DWC:

Trigger	Required action	Deadline / window	If you miss it	Official route
You have one or more non-exempt Texas employees and no coverage	File the Employer Notice of No Coverage (DWC Form-005). Employers whose only workers are exempt under §406.091(a) are outside the filing duty — verify before relying on an exemption.	Per the events below	Administrative penalty exposure; §406.004(e) makes failure to comply an administrative violation, and the filing is still accepted late, so file rather than skip	Employer E-File (online), or the filing routes on the current DWC Form-005
Annual window	Re-file DWC Form-005 each calendar year for as long as you remain a nonsubscriber. The notice covers from May 1 of the year you file through the end of the following April (28 TAC §110.103(b)(1)).	February 1 – April 30 each year	Penalty exposure; file as soon as you identify the miss, and expect DWC to treat the lapse as a compliance question	Employer E-File
You hire your first employee	File DWC Form-005 (28 TAC §110.103(b)(2)).	Within 30 days of the first hire — unless that date falls between February 1 and April 30 and you file within that window	Same as above; the duty does not expire because the 30 days did	Employer E-File
You notify your carrier to terminate coverage	File DWC Form-005. The carrier separately files its own notice with DWC.	Within 10 days after you notify the carrier under §406.007 — not 10 days after the policy date (28 TAC §110.105(a)). No DWC-005 is due if you buy a new policy or become a certified self-insurer	Penalty exposure, a later effective date for your own termination, and a coverage question you may have to explain to a client or governmental entity holding your certificate	Employer E-File
Your termination takes effect	Nothing to file — but know the date, because it governs everything else.	The later of the 30th day after DWC receives your notice, or the policy cancellation date (28 TAC §110.105(c))	Coverage is extended until that date and you are obligated for premium for that period (§110.105(d)). Filing late moves this date later, not earlier	Not applicable — this is the effective-date rule that dates the other duties
DWC asks you to file	File DWC Form-005.	Within 10 days of receipt of the request (28 TAC §110.103(b)(2))	Penalty exposure, and a direct compliance record with the agency that asked	Employer E-File

Track two — what you give and post for employees (28 TAC §110.101; statutory basis at Labor Code §406.005):

Trigger	Required action	Deadline / window	If you miss it	Official route
A new employee starts	Give the employee written notice that you do not carry workers' comp coverage.	At hire — meaning when the employee is required to complete both a W-4 and an I-9 (28 TAC §110.101(a)(1))	The ungiven notice is itself the violation, whether or not anyone is ever injured. Giving it now does not cure the period without it	Employer forms and notices
Your coverage terminates or is canceled	Give each employee written notice of the change in coverage status.	Not later than the 15th day after the date the termination or cancellation takes effect (28 TAC §110.101(a)(2))	Same as above, and this is the notice most often missed because the employer is busy re-quoting	Employer forms and notices
You obtain coverage	Give each employee written notice, including the statement that the employee may elect to retain common-law rights.	Not later than the 15th day after coverage takes effect. The notice must state that the employee may keep those rights by telling you in writing within five days of starting work or of receiving your notice (28 TAC §110.101(a)(3), (a)(5))	An employee who was never given the notice was never given the election — and a covered employer still files DWC-007 for an employee who has waived coverage	Employer forms and notices
Ongoing workplace posting	Post the prescribed no-coverage notice (Notice 5) in the workplace — in English, Spanish, and any other language common to your workforce, as the rule requires.	Continuously	The unposted notice is itself the violation. Posting now does not cure the period without notice	Notice 5 per 28 TAC §110.101(e)

Track three — reporting an injury:

Trigger	Required action	Deadline / window	If you miss it	Official route
A work-related injury, illness, or death occurs	If you are a private nonsubscriber with at least five employees who are not exempt from coverage: report each work-related injury that keeps the employee off work more than one day, each occupational illness you have knowledge of, and each fatality, on DWC Form-007.	No later than the seventh day of the month following the month of the event	The report is still owed. File it late rather than not at all, and expect penalty exposure	DWC Form-007; Labor Code §411.032 and 28 TAC §160.2

The filing route is worth thirty seconds of orientation. Employer E-File is DWC's online reporting tool for nonsubscribers: file, save, and manage the annual no-coverage notices from any device, and report workplace injuries, illnesses, and deaths through the same tool. The DWC Form-005 asks for your business identity, locations, NAICS code, the effective dates of your no-coverage status, and a statement about reportable injuries since your last filing — every field is required, and adding, dropping, or changing a location means filing a fresh form. Keep your own dated copy of each filing and each employee notice: if a DWC inquiry arrives, the record that you filed on time is yours to produce.

Three things the table does not say on its face. First, the five-employee figure is a reporting threshold for nonsubscribers — it is not a coverage mandate, and it does not mean smaller nonsubscribers have no duties: the DWC-005 filing duty attaches at one non-exempt employee, and the notice duties attach regardless of headcount. Second, both the DWC-005 and the DWC-007 duties turn on the same statutory exemption list at §406.091(a) — 28 TAC §160.2 sets the DWC-007 threshold at five or more employees "not exempt from workers' compensation insurance coverage" without restating the categories, so read the statute rather than either form's summary of it. Third, the deadlines above come from the governing rules in 28 TAC Chapter 110 and from the current DWC Form-005 and Form-007 instructions (both Rev. 01/25 at last check); form revisions change, so confirm the live form before filing rather than relying on any dated summary, including this one.

What the penalty exposure actually is. Missed or late filings can draw administrative penalties. Under Labor Code §415.021(a) an administrative penalty may not exceed $25,000 per day per occurrence, and each day of noncompliance is a separate violation. That is a statutory ceiling, not a schedule: §415.021(c) sets the factors DWC weighs, DWC does not publish a penalty matrix, and what a specific lapse actually costs is a question for DWC at 800-252-7031. Statutory — verified 2026-08-08.

One conflict to know about before you rely on a date. TDI's nonsubscriber page states that employers who end coverage become nonsubscribers on the date the policy ends. For employer-initiated terminations, 28 TAC §110.105(c)–(d) sets the later date in the table above. This page follows the rule, because a rule outranks a summary of it — but the two live sources say different things, so if the date matters to a client, a governmental entity, or an audit, confirm it with DWC before you act on either version. Conflict identified and disclosed 2026-08-08; unresolved.

If the first-hire trigger is what brought you here, the broader onboarding obligations — payroll, posters, and everything beyond workers' comp — live in the first employee checklist.

What changes if the employer carries coverage?

Sources: TDI employer resources (last updated 2026-06-08) and Employer FAQ; Labor Code §§406.034, 408.001; 28 TAC §160.3. Verified 2026-07-20, rechecked 2026-07-25 and 2026-08-08. Editorial explanation only — not a recommendation to subscribe or not.

Carrying coverage replaces the nonsubscriber duties above with a different set rather than removing them.

For employees, a workers' compensation policy provides lost wages and medical benefits for on-the-job injuries. For the employer, the trade is the exclusive-remedy bar at Labor Code §408.001: recovery of workers' compensation benefits is generally the exclusive remedy of an injured employee against a subscribing employer, with the exemplary-damages exception at §408.001(b) where an employee's death is caused by the employer's intentional act or omission or gross negligence.

Operationally, a covered employer reports to its insurance carrier every work-related injury that results in more than one day of lost time, and all work-related illnesses and deaths — the carrier, not the employer, then handles the claim reporting into the state system. Covered employers also post and distribute the coverage notices DWC prescribes for their route (Notices 6, 7, or 10 and the new-employee notice, as applicable), and must give each employee written notice within 15 days of coverage taking effect, carrying the employee's five-day election to retain common-law rights (28 TAC §110.101(a)(3), (a)(5)). Confirm the current notice set for your specific route on the employer forms and notices page rather than reusing another employer's poster.

One DWC-007 duty survives coverage. If an employee has waived workers' compensation coverage under Labor Code §406.034, a covered employer — whether insured commercially or self-insured — files DWC-007 for that employee's death, occupational disease, or on-the-job injury causing more than one day's absence, on the same timeframe nonsubscribers use (28 TAC §160.3(b)). That waiver is the five-day election above, exercised.

What the coverage actually pays for

Sources: Labor Code §§408.081–408.187; §408.082; DWC's income and medical benefits page. Verified 2026-08-08. No benefit amounts are published here: they are set by the Act and by maximums and minimums DWC publishes and updates, not by the carrier.

The nonsubscriber's side of the Texas choice is a promise to self-fund whatever the Act would otherwise have paid, so it is worth knowing what that is. DWC describes four kinds of benefit: income benefits, which replace part of the wages an employee loses; medical benefits, which pay for necessary care for the work-related injury or illness; death benefits, paid to eligible family members; and burial benefits, which cover part of a funeral. Income benefits divide again into four types — temporary (TIBs), impairment (IIBs), supplemental (SIBs), and lifetime (LIBs) — each with its own eligibility test in Chapter 408.

For an employer weighing the choice, two features of that structure do the work. Income benefits do not start on day one: under §408.082, income benefits may not be paid for an injury that does not result in disability for at least one week, and where disability continues longer than a week they begin to accrue on the eighth day. Medical benefits carry no equivalent wait. And the amounts are not the carrier's to set — they are statutory, tied to the state average weekly wage, with maximums and minimums DWC publishes.

Seen side by side, the two statuses trade different currencies — this card compares what daily operations feel like, which the matrix rows above don't cover:

Covered employer: premium cost and payroll audits · claims flow through the carrier · statutory benefits for injured employees · exclusive-remedy protection under §408.001, subject to its gross-negligence exception · carrier-prescribed reporting and coverage notices. Nonsubscriber: no premium, but self-funded exposure to injury costs and suits · the DWC-005/notice/DWC-007 compliance calendar is yours alone · no statutory benefit structure for employees · no exclusive-remedy protection, and the §406.033 common-law defenses are unavailable. Neither column is a recommendation — the trade-offs price differently for every business.

What a nonsubscriber gives up

Texas backs the subscribe/don't-subscribe choice with a specific legal consequence, and it is the half of the decision that quote-funnel content usually leaves out.

Under Labor Code §406.033(a), in a suit by an injured employee who is not covered, it is not a defense that the employee was contributorily negligent, that the employee assumed the risk of injury or death, or that the injury was caused by the negligence of a fellow employee. Those three common-law defenses are simply unavailable. Under §406.033(e), a pre-injury agreement by an employee to waive that cause of action is void and unenforceable — a signed waiver collected at hire does not do what an employer might assume it does.

The picture is not one-sided. The employee must still prove the employer's negligence, or that of an agent or servant acting within the scope of employment (§406.033(d)). The employer may still defend on the ground that the injury was caused by the employee's intentional self-injury or while the employee was intoxicated (§406.033(c)). And the statute keys on the employee not being covered, not on the employer's label: under §406.091(c), an employer that does not obtain coverage for statutorily exempt employees is not deprived of those defenses as to them.

A waiver after an injury is a different question from the void pre-injury one, and worth knowing before someone puts one in front of you. Under §406.033(f) a post-injury waiver is effective only if the employee enters it voluntarily with knowledge of its effect, not earlier than the 10th business day after the initial report of injury, after receiving a medical evaluation from a nonemergency-care doctor, and in a writing that specifically states the parties' true intent — and under §406.033(g) the waiver provisions must be conspicuous, in larger or contrasting type. If a waiver is in front of you on either side of an injury, that is a document for an attorney, not a form to sign.

So the Texas choice is premium, payroll audits, and a compliance calendar on one side, against tort exposure with three standard defenses removed and no exclusive-remedy bar on the other. Statutory — verified 2026-08-08. This states the rule, not its application to your situation, which is a question for an employment or construction attorney.

One boundary deserves its own sentence: TDI-certified self-insurance — including participation in a certified self-insurance group — is an authorized coverage route, not a way of going without coverage. A private employer that wants to self-insure applies to TDI for certification; a group route exists under Labor Code Chapter 407A. An employer that simply stops buying a policy without certification is a nonsubscriber, with every duty in the previous section. And no substitute arrangement — an LLC, a license, a bond, an occupational accident policy, or a private benefit plan — converts a nonsubscriber into a covered employer.

What actually moves the subscribe or don't-subscribe decision

Editorial guidance, not insurance or legal advice. No premium figures are published on this page. The factors below are the ones the governing law and standard audit practice actually turn on; weighing them for your business is a conversation for a licensed Texas agent or broker and, where tort exposure is the driver, an attorney. Verified 2026-08-08.

Texas is the state where this is a real choice, so it deserves a real structure rather than a shrug. Work the factors in order — the first one often ends the analysis before the others matter.

Factor	What pushes toward carrying coverage	What pushes toward staying a nonsubscriber
Gates you do not control	A governmental entity, a building or construction project for one, a client contract, or a license condition can require coverage or a documented election. Any of these ends the analysis.	Not applicable — a gate is not a preference. Confirm first, decide second.
Payroll and the classification of the work	Higher payroll performing higher-hazard work means more frequent and more expensive injuries to self-fund, and the classification code is what tells you which you are.	A very small payroll in low-hazard work, where the carrier's minimum premium may exceed the exposure you are transferring — ask what that minimum is before assuming.
Tort exposure	Without coverage you lose contributory negligence, assumption of risk, and fellow-employee negligence (§406.033(a)) and you have no exclusive-remedy bar (§408.001).	You keep those defenses as to statutorily exempt employees you do not cover (§406.091(c)) — a narrow lane, not a general answer.
What your employees get	Statutory income, medical, death, and burial benefits under Chapter 408, administered by a carrier with a claims operation behind it.	Whatever you choose to fund yourself. There is no statutory benefit structure, and an occupational accident policy is not a substitute for one.
The compliance calendar	The carrier handles claim reporting into the state system; you post and distribute the notices for your route.	DWC-005 filings, employee notices, and DWC-007 reporting are yours alone, with penalty exposure up to $25,000 per day per occurrence under §415.021(a).
What a serious injury would do to the business	A single catastrophic injury is the scenario the transfer exists for; lifetime income benefits under §408.161 have no time limit.	A balance sheet that can absorb the modelled exposure, and a documented plan for what happens if it cannot.

The table stops at two deliberate boundaries. It does not price the decision — that needs your payroll, classification codes, and loss history, and it belongs in a quote. And it does not weight the factors, because the weighting is yours: the same row that decides it for a two-person cleaning company decides nothing for a framing crew.

What workers' comp does not cover

Coverage boundaries stated from the Texas Workers' Compensation Act and standard policy structure; verified 2026-08-08. What a specific policy covers is set by its own form, endorsements, and exclusions — read yours.

What the policy does not do matters as much as what it does. A workers' compensation policy responds to employee injury. It does not cover the owner, partners, or LLC members unless owner coverage is specifically elected and accepted; it does not respond to injury to a customer, a passer-by, or anyone who is not your employee; it does not pay for damage to property or to your own work; and it does not automatically follow your crew into another state's mandatory system.

That leaves real gaps a trade business will meet in a normal week:

Situation	Workers' comp position	What actually responds
Your helper is hurt on a jobsite	Covered, if the helper is your employee and you are a subscriber	The workers' comp policy
You are hurt, as sole proprietor, partner, or officer	Not covered unless owner coverage is elected — see §406.097	An owner-inclusion election on the policy, or separate accident and health cover
A client trips over your extension cord	Not covered — the injured person is not your employee	General liability; see the general liability hub
You damage a customer's floor	Not covered	General liability, subject to its own exclusions
Your own installed work is defective and has to be redone	Not covered	Usually neither — the "your work" exclusion is a general liability question, covered on the GL hub
Your truck is in an at-fault wreck driving between jobs	Not covered	Commercial auto. A personal auto policy generally excludes business use, so a work truck on a personal policy is a gap, not a saving
Your tools are stolen from the truck overnight	Not covered	Tools and equipment / inland marine cover
You run the business from home — stock, tools, or a client visit at the house	Not covered; workers' comp responds to employee injury only	A homeowners policy generally excludes business property and business liability at the residence, so this needs a business policy or endorsement. See the home-based business insurance guide
Your crew works a week in Ohio	A Texas policy does not extend into a monopolistic state's system	That state's fund — see out-of-state work

What this is not

Six things Texas trade owners routinely over-read. Each of these has cost somebody a claim.

Thing readers over-read	What it actually is	What it does not do
A certificate of insurance	Evidence summarizing a policy that already exists	Does not create, extend, or amend coverage, and cannot legitimately exist without a policy behind it
A surety bond	A guarantee to the state or a customer that you will perform or pay, backed by your promise to repay the surety	Does not pay your injured employee and does not protect you — you repay the surety. See the license and permit bonds hub
An LLC	A liability structure for the business	Does not convert a nonsubscriber into a covered employer, and does not answer any DWC filing duty
An occupational accident policy	A benefits product some Texas nonsubscribers buy	Does not make you a subscriber, does not provide the Act's statutory benefits, and does not restore exclusive-remedy protection or the §406.033 defenses
Certified self-insurance	An authorized coverage route requiring TDI certification	Is not the same as going without coverage, and is not available by simply not buying a policy
The five-employee figure	A DWC-007 reporting threshold for nonsubscribers	Is not a coverage mandate, and does not exempt smaller nonsubscribers from filing or notice duties

Employees, owners, contractors, and out-of-state work

Sources: Labor Code §§406.097, 406.121–406.123; 28 TAC §112.101; DWC Form-085; TDI's endorsement form list. Verified 2026-08-08. Individual worker status: Partial — your actual facts control.

This is the section where a Texas answer most often goes wrong, so it is short on conclusions and long on the statutes that govern.

Whether a particular person counts as an employee for Texas workers' compensation purposes is a fact-specific determination under Texas law. A "1099 contractor" label, a contract clause calling someone independent, or a payroll category does not decide it. Texas does answer three of these questions by statute, and the answers are worth knowing before you guess.

Owners, partners, and officers — §406.097. A sole proprietor, partner, or corporate executive officer of a business entity that elects to provide workers' compensation coverage is entitled to benefits under that coverage as an employee unless specifically excluded by an endorsement to the policy or the certificate of authority to self-insure. In other words, the default on a covered entity runs toward inclusion, and exclusion is an affirmative act documented on the policy. A corporate officer with at least 25 percent equity may be excluded, and §406.097(c) allows a sole proprietor, partner, or 25-percent officer to be excluded notwithstanding §406.096 — which is the hook behind the public-project exclusion at 28 TAC §110.110(i).

Ask for the endorsement itself, not a description of it. In Texas the two forms are named in TDI's endorsement form list: the Partners, Officers and Others Exclusion Endorsement (WC 42 03 08) takes a person out, and the Sole Proprietors, Partners, Officers and Others Coverage Endorsement (WC 42 03 10) brings one in. Both work from a schedule of named persons — so if a name is missing from the schedule, the endorsement does not reach that person, whichever direction you intended.

General contractors and subs — §§406.121–406.123. Under §406.122(a), a person who performs work or provides a service for a general contractor who is an employer is treated as that general contractor's employee for workers' compensation purposes, unless the person is operating as an independent contractor or is hired as the employee of one. Under §406.122(b), a subcontractor and the subcontractor's employees are not the general contractor's employees if the subcontractor has entered into a written agreement with the general contractor evidencing that the subcontractor assumes the responsibilities of an employer for the work — the agreement DWC Form-085 exists for. And under §406.123(b), if a general contractor carries workers' compensation and contracts with a subcontractor who has no employees, the general contractor shall be treated as the employer of that subcontractor and may deduct the premium. A general contractor who enters a §406.123 agreement must file a copy with its carrier within 10 days of execution (§406.123(f)); failing to file is an administrative violation (§406.123(g)). 28 TAC §112.101 sets what the agreement must contain: writing, a statement that the sub and its employees are the general contractor's employees for the sole purpose of workers' compensation coverage, whether premiums are deducted, whether it is blanket or job-specific, both signatures, and the dates and estimated worker count.

Read §406.123(b) twice if you hire solo subs. Hire a one-person sub without the paperwork, and Texas law may already regard you as that person's employer for workers' compensation purposes.

What is still open. Staffing and leasing arrangements, workers who declined coverage, contested independent-contractor status, and employees who split time across states are not resolved here. Those depend on facts and documents this page cannot see — and under this site's evidence rules, a Blocked field produces no public conclusion — not a hedged one, none.

Do not assume: that owners are always exempt; that 1099 workers never count; that a staffing agency's coverage automatically protects the client business; that declining coverage was validly done; or that Texas rules travel with a crew across state lines. Each of those is a question for DWC, or for an employment or construction attorney with your actual facts. If you are a genuine independent operator asking the adjacent question — what insurance you need for your own one-person business — that job belongs to the independent contractor insurance guide, and note that it will not tell you whether you are a contractor; that is not an insurance page's call to make.

Out-of-state work and the four monopolistic states

State-fund status and agency routes checked 2026-08-08. Each state's own agency is the governing authority for work performed there; confirm with it before the crew travels.

An out-of-state job may sit under another state's mandatory system on the days the crew works there, whatever Texas says the rest of the year. Texas provides for extraterritorial coverage at §406.071 and all-states coverage at §406.053, but neither makes a Texas policy universal.

Four states go further than a mandate. In Ohio, North Dakota, Washington, and Wyoming, workers' compensation is obtained from a state fund and private policies are not sold for that coverage, so a Texas policy does not extend into them. A crew working in one of those states registers with the state system — and separately needs employer's liability coverage — the part that responds when an injured worker sues the employer directly rather than claiming statutory benefits — endorsed onto another policy. In these states it is usually called stop-gap coverage, because the state funds provide the compensation benefit and not the employer's liability part. Wyoming's requirement is driven by the classification of the work rather than applying universally, and out-of-state employers may be treated differently depending on the work and existing coverage, so confirm your specific job. Start with the governing authority for the state you are working in:

• Ohio — Ohio Bureau of Workers' Compensation
• North Dakota — Workforce Safety & Insurance
• Washington — Department of Labor & Industries
• Wyoming — Department of Workforce Services, Workers' Compensation

For every other state, check the state where the work happens in the workers' comp requirements by state matrix before the crew travels, and tell your agent the itinerary — this is a question to settle before the first day on site, not after an injury.

Government projects, client contracts, and proof

Sources: Labor Code §406.096; 28 TAC §110.110; DWC Notice 8 (Rev. 12/15); Texas Insurance Code Ch. 151. Verified 2026-08-08. Contract terms: Partial — your actual document controls.

Two different forces can convert Texas's private-employer choice into a hard requirement: a government construction project, and a contract.

The government-project rule. The statute and the rule work at different widths, and the difference matters. §406.096(a)–(b) requires the governmental entity to make the contractor certify in writing that it provides coverage for each of its employees on the public project, and requires each subcontractor to provide the same certificate for its own employees to the general contractor, who passes it to the entity. DWC's prescribed Notice 8 and 28 TAC §110.110(a)(7) go wider: each person working on the site or providing services related to the project must be covered — including people providing, hauling, or delivering equipment or materials, or providing labor, transportation, or other project-related services — regardless of whether that person contracted directly with the contractor and regardless of whether that person has employees. §406.096(c) lets a contractor provide that coverage through a group plan or another method satisfactory to the entity's governing body. Under the rule, the contractor posts the prescribed notice on each project site — in English, Spanish, and any other language common to the worker population — and runs the certificate chain set out in collecting sub certificates. The scope has edges, set out in which trades fall inside. Do not stretch this rule beyond its scope in either direction: it does not mean every vendor to every government agency needs workers' comp, and it does not mean a private-project crew can ignore it on a public one.

Private contracts. A client, general contractor, landlord, venue, or lender can require workers' compensation coverage, specific limits, endorsements such as a waiver of subrogation, and proof — even where state law requires nothing. The requirement lives in the document, so read the document. Before you bid or sign, pull these fields out of the actual current contract:

Project / contract proof card: who the parties are (your entity name exactly as insured) · the project owner or certificate holder and its address · the work scope and project dates · the exact insurance clause — coverage types, limits, and required endorsements · who must provide certificates (including subcontractors) · when proof is due and to whom · which coverage routes the document accepts.

What the contract's insurance words actually mean. Four terms do most of the work in a general contractor's insurance clause, and they are not interchangeable:

Term	What it means	What has to happen for you to have it
Certificate holder	The party that receives a copy of the certificate	Nothing but a request. It confers no rights under your policy
Additional insured	The other party is given rights under your policy	An endorsement issued by your carrier. A name typed on a certificate does not do it
Primary and non-contributory	Your policy pays first and does not ask the other party's policy to share	An endorsement, and carrier agreement to provide it
Waiver of subrogation	Your carrier gives up its right to recover from the other party after paying a claim	An endorsement, usually at additional cost

Read the contract's indemnity clause separately, because it is not an insurance clause and it can reach further than any policy behind it. Texas limits how far it can reach: under the Texas Anti-Indemnity Act (Insurance Code §151.102, effective 2012-01-01), a provision in a construction contract is void and unenforceable to the extent it requires you to indemnify, hold harmless, or defend another party against a claim caused by that party's own negligence or fault — and §151.104 voids matching additional-insured requirements to the same extent.

That protection has edges, and they are wide ones. §151.103 carves out claims for the bodily injury or death of an employee of the indemnitor, its agent, or its subcontractor of any tier — broader than "your own crew," and it is the exception that most often swallows the rule on a jobsite. The chapter's definition of "construction project" at §151.001(2) excludes a single family house, townhouse, duplex, or land development directly related to them. And §151.105 sets out what the subchapter does not affect — including, at §151.105(10), indemnity provisions pertaining to those same residential projects and to a public works project of a municipality. If your job is a municipal public work, do not assume the anti-indemnity protection reaches your contract. This is a construction attorney's question — but knowing the statute and its exclusions exist is what tells you a clause is worth challenging rather than swallowing.

The proof boundary. A certificate of insurance summarizes coverage that already exists; it does not create, extend, or amend a policy. Endorsements a contract demands must actually be added to the policy by the carrier — a name typed onto a certificate adds nothing. There is no legitimate version of proof without valid coverage: no "ghost policy," no altered or backdated certificate, no borrowed COI. If a contract's proof demands are the pressing problem, the certificate of insurance explainer owns that workflow — certificate holders, additional insured requests, endorsements, and how legitimate proof actually gets issued.

Collecting sub certificates and surviving the audit

Sources: Labor Code §§406.096, 406.123; 28 TAC §110.110. Verified 2026-08-08. Audit mechanics are general market practice, not a Texas statutory rule — confirm your own policy's audit terms with your carrier.

Collecting certificates from the people who work for you is the stage most content skips, and it is where money is won and lost. In Texas it has two engines: a statutory one on public projects, and a financial one everywhere else.

On a governmental project, collection is the rule, not good practice. Labor Code §406.096(b) requires each subcontractor on the project to provide a certificate covering its employees to the general contractor, who provides it to the governmental entity. 28 TAC §110.110 then builds a full chain of duties, and the deadlines are specific:

• An acceptable certificate of coverage is a certificate of insurance, a certificate of authority to self-insure issued by the division, or a filed coverage agreement on DWC Form-81, -82, -83, or -84 (§110.110(a)(1)). The coverage-agreement route is how a person providing services without their own policy can be brought into compliance — it is a filed agreement establishing who is responsible for coverage.
• The certificate must cover the duration of the project — from the beginning of work until the work is completed and accepted by the governmental entity (§110.110(a)(6)).
• The contractor provides its own certificate to the governmental entity before beginning work (§110.110(d)(2)), and obtains a certificate from each person providing services before that person begins work on the project (§110.110(d)(4)(A)).
• If a coverage period ends mid-project, a new certificate showing extension is due before the period ends for the contractor's own coverage, and within seven days of receipt for everyone else's (§110.110(d)(3), (d)(4)(B)).
• The contractor must notify the governmental entity in writing, by certified mail or personal delivery, within ten days of knowing — or of when it should have known — of any change that materially affects coverage of any person on the project (§110.110(d)(6)).
• The contractor retains all certificates for the duration of the project and one year after (§110.110(d)(5)); the governmental entity retains them for three years (§110.110(c)(5)).
• The contractor must contractually require everyone it hires to do the same, down every tier (§110.110(d)(8)) — and the rule prescribes the exact contract language to use, without additions or changes (§110.110(e)(3)).

One line in that rule deserves the reader's full attention. Under §110.110(b), providing a certificate of coverage is a representation that everyone covered is properly reported — that the coverage is based on proper reporting of classification codes and payroll amounts, and that all coverage agreements have been filed. A classification code (or class code) is the four-digit code a carrier assigns to describe the work a group of your employees actually performs; it sets the rate applied to their payroll, and it also frames what the carrier understood it was insuring. Providing false or misleading certificates, failing to maintain required coverage, or failing to report a material change may expose the contractor or any person providing services to administrative, criminal, or civil penalties. On a public job, misclassifying a roofer as a carpenter to lower a premium is a misrepresentation with a statute attached.

Off a public project, the consequence is financial rather than statutory. Workers' compensation premium is an estimate, charged at the start of the term against estimated payroll and operations, and reconciled by audit at the end against what actually happened. At that audit, payments to subcontractors who cannot produce their own certificate of coverage for the period they worked are commonly charged to you as payroll, at a classification the auditor assigns. A sub whose policy lapsed in March and who worked for you in June is, at audit, your payroll for June. This is the single largest premium surprise in the trades, and it is avoidable only before the fact — after the audit, you are arguing about a bill rather than preventing one. Texas adds a statutory edge to the same point: under §406.123(b), a covered general contractor who hires a subcontractor with no employees is treated as that subcontractor's employer for workers' compensation purposes.

Sub-certificate collection checklist:

• Get the certificate before the first day on site, not at the end of the job and not at audit.
• Check the policy period actually covers every date worked — a certificate is a snapshot, and the dates are the point.
• Check the sub's entity name matches the entity you pay. A certificate for "J. Ramirez" does not cover payments to "Ramirez Framing LLC."
• Get a fresh certificate at each renewal during a long job, and diary the expiry date when you file it.
• Keep a dated file copy through your own audit and, on a public project, through the retention period the rule sets.
• For a person with no employees and no policy, use the DWC-81/82/83/84 coverage-agreement route rather than assuming an exemption applies — and on a public project, confirm whether §110.110(i)'s §406.097 exclusion is the correct path instead.
• Before your audit, assemble: the certificate file, your payroll records by worker and classification, your subcontractor payment ledger, and your own policy's classification schedule. Ask your agent what basis the auditor will use before the auditor arrives.

How these rows were verified

Research date 2026-07-20; key DWC pages, forms, and notices rechecked 2026-07-25; Labor Code, Insurance Code, Occupations Code, and Administrative Code text read and verified 2026-08-08. Next scheduled review 2026-10-18, and immediately after any DWC page, form, rule, or statute change.

Every consequential row on this page follows the same evidence rules. Sources are used in this order: the Texas statutes and DWC rules first, then official Texas Department of Insurance, Division of Workers' Compensation pages, forms, and notices, then nothing else — an insurer's marketing page, a search snippet, or a national summary is never the authority for a Texas requirement here. Where a form's instructions or an agency summary page disagrees with the governing rule, this page follows the rule and names the divergence rather than smoothing it. Each row records the rule, who it applies to, the trigger, the required action, the official form or portal, the direct source, the as-of date, and one of these verification statuses:

Status	What it means here — and how far to trust the row
Verified	A current primary source directly supports the field and its applicability. Act on it, and still confirm the live form the day you file.
Verified with limitation	A primary source supports the core claim, but a scope, definition, or interpretive limitation remains. Safe to act on within the stated limitation — the limitation is the row's most important cell.
Partial	Some fields are verified; a consequential field still depends on evidence we don't have, usually your actual contract or facts. Gather the missing document.
Blocked	The governing source hasn't been sufficiently opened or reviewed, so no public conclusion is drawn. Ask the official source.
Superseded	A newer governing source has replaced the one previously relied on, or a rule's underlying authority has been repealed or recodified. Treat the row as unresolved until the current authority is confirmed.
Not applicable	The field does not apply to the defined row, with a verified reason — a blank never means "no requirement."

If you see a status change between visits, that is the system working: a form revision, rule change, or DWC page update moves a row back into review here.

Where the rule text was read. Labor Code, Insurance Code, and Occupations Code sections link to the Texas Legislature's official statute site. Administrative Code links open the Secretary of State's viewer at chapter level, so every citation on this page names the exact rule number and, where the point turns on it, the subsection — open the chapter, then find that number. Where a rule governs a duty, the official DWC form carrying that duty is linked alongside. All statute and rule text cited here was read in full on 2026-08-08.

Two limitations apply to the whole page. First, reading a statute is not the same as applying it: where a section's application to your facts is contested or fact-specific, this page names the section and stops. Second, a blank or missing cell anywhere on this page never means "no requirement, no deadline, no exception." If a field matters to your situation and isn't Verified here, treat it as unresolved and use the official verification path. This Texas page and its national parent share row identifiers and review dates, so an update to either triggers review of both; for how other states handle the same questions, see the workers' comp requirements by state matrix. What this page does not decide. It does not tell you whether a specific worker is your employee, what your premium will be, which carrier or program to use, whether your trade falls inside §406.096 at the margin, or what any local authority requires. It does not price the subscribe/don't-subscribe trade for your business, and it is not a substitute for reading your own contract. Everything on this page is general editorial information from Cover My Trade, an independent publisher, written and maintained by the Cover My Trade editorial team — not an insurance agency, broker, carrier, or advisor, and nothing here is a quote, a binder, or legal advice. DWC, the governing law and rules, your actual contract, and qualified professionals control your specific determination.

How to verify the current rule and take the next step

Official contacts and tools rechecked 2026-07-25; statutes and rules verified 2026-08-08.

Everything above funnels into one short, safe workflow. Work it in order:

1. Identify your row — employer type, coverage status, and any project, license, or contract in play, using the six-fact gate and the matrix.
2. Open the official source cited in your row — the statute, rule, DWC page, form, or notice — and confirm it is current. Forms carry revision dates; use the live version.
3. Gather your facts: entity type, Texas workers and their status questions, payroll basics, project and contract documents, license conditions, coverage and termination dates.
4. Record the as-of date and what you verified. If a rule and a summary disagree, the rule wins; if two sources disagree, stop and ask.
5. Flag what the page cannot resolve — individual worker status, staffing arrangements, multi-state splits, local overlays — and put those to DWC, to a licensed Texas insurance agent or broker for placement, eligibility, and what a quote actually includes, or to an employment or construction attorney for indemnity, contract terms, and worker-status disputes, before acting on them.
6. Use the official channels: DWC at 800-252-7031; coverage questions and employer-coverage verification via DWC's coverage verification page (a DWC representative responds to written verification requests, and registered nonsubscribers appear on the Texas Open Data Portal); nonsubscriber filings through Employer E-File.
7. Then act on the legitimate route — file the current form, quote and bind real coverage, pursue TDI certification, or provide proof that follows a valid policy.

When the answer is "no market" or "not anymore"

Four situations break the normal path. Each has a first move that is not "shop harder."

• Your policy is non-renewed or canceled mid-project. You will become a nonsubscriber, and on a governmental project you simultaneously fall out of §110.110's certificate-for-duration requirement, which is a contract problem as well as a coverage problem. Tell the governmental entity's contract administrator and your agent the same day. Then get the effective date right: if the carrier is canceling or non-renewing, the carrier's notice controls the date, and 28 TAC §110.1 requires the insurance company to notify DWC in advance of a cancellation or non-renewal taking effect. If you are the one terminating, §110.105(c) dates it as described in the duty timeline. Re-quote against that date, not against the day you found out.
• No market will write your operations. Carrier appetite is trade- and loss-driven, and some trades are written by very few markets. Ask your agent specifically which markets declined and why, and whether a surplus-lines placement exists for your classification — an admitted carrier being one licensed by TDI to write in Texas, and a surplus lines carrier one that is not licensed here but may write risks the admitted market declines, with different regulatory and guaranty-fund protections you should ask about specifically. "No" from one agency is not "no" from the market.
• Your loss history moved the price out of reach. Before treating the number as the market's answer, ask what the quote assumes about your payroll, your classification codes, and your claims. A misassigned classification is the most common fixable cause of a quote that looks impossible. If the number still does not work, price the alternative honestly using the decision factors rather than defaulting into nonsubscription without documenting the duties that come with it.
• You have been operating uninsured and want to fix it. A new policy covers injuries occurring after it binds; it cannot reach one that already happened, and no legitimate route makes it do so. File what is currently owed on DWC-005 rather than filing nothing while you shop, report any injury that has occurred as the rules require, and take a past injury to the carrier's claims line and to an attorney — not to a backdating request.

Only after the requirement answer is settled does shopping make sense; when it does, the workers' comp insurance hub carries quote preparation, cost drivers, and current options. Readers still triaging which coverages their business needs at all can zoom out to what insurance does my business need.

Before you quote workers' comp: what to confirm for your situation

Editorial guidance only. No provider is named, ranked, or endorsed on this page; named comparisons are owned by the workers' comp insurance hub. Nothing below is a promise of coverage, eligibility, or price.

When the matrix says you need — or have decided you want — coverage, shortlist by documented characteristics, not by ad placement. Use one card for every option you look at: reuse the verification workflow and the project/contract proof card above as your per-provider scorecard — same facts, same documents, same questions to each option — rather than letting any provider's own form decide what gets compared.

Your situation	Shortlist move	Confirm in the quote
Solo operator taking a first hire — handyman, cleaner, landscaper, any trade	Verify first: open your matrix row and the DWC employer resources before shortlisting. Your answer may be a filing duty rather than a purchase	Whether anything about your entity, workers, license, or contracts removes the choice; what filing applies if you stay uncovered; the carrier's minimum premium for a payroll your size
Building or construction sub bidding public work — roofing, electrical, plumbing, HVAC, concrete, site work	Quote licensed Texas coverage before bidding, and confirm the coverage route the bid documents accept — §406.096(c) allows a group plan or another method satisfactory to the entity	That every person providing project services is covered under your plan; classification codes match the work; certificate-of-coverage and posting support for the project's duration
Solo or micro operator with a client contract requirement — painter, flooring installer, any specialty sub	Quote owner-inclusive coverage against the contract's exact clause	Owner inclusion or exclusion under §406.097, by named endorsement (WC 42 03 08 or WC 42 03 10) and its cost basis; the endorsements the contract names; how the certificate holder's details are handled
Established crew with a policy ending or being rewritten — any trade	Re-quote before you notify the current carrier, so the new effective date lands before the old coverage ends	Exact effective and termination dates against §110.105(c); what notices and filings apply if any gap occurs; audit and payroll-basis terms
Crew that runs on 1099 subs — remodelers, landscapers, cleaning companies	Quote with your actual subcontractor spend disclosed	How uncertified subcontractor payments are treated at audit; whether any §406.123 agreement is in place and filed with the carrier within 10 days
Licensed trade applying or renewing — electrical and other TDLR-regulated programs	Decide and document the election before the application is due, not after	What evidence the licensing program accepts — proof of coverage, a certificate of authority to self-insure, or the documented election — and whether your DWC filing is current
Non-renewed or coming off a claim — any trade, most often higher-hazard work	Ask your agent which markets declined and why before you re-shop, and check whether a surplus lines placement exists for your classification	What the quote assumes about your loss history and classification; whether the market is admitted or surplus lines and what that changes about guaranty-fund protection; the earliest date coverage can bind against your current termination date
Facing an audit bill driven by uncertified subs — remodelers, GCs, any crew using subs	Fix the collection process before the next term rather than only disputing this bill	What basis the auditor used and which payments were reclassified as payroll; what certificate evidence the carrier will accept retroactively; how the next term's estimate treats your subcontractor spend
Larger employer weighing self-insurance	TDI's certification route for individual self-insurance, or a certified group under Ch. 407A. This is an application to a regulator, not a purchase	The qualifying financial thresholds, application timeline, and security requirements — these are not published on this page; ask TDI directly before treating self-insurance as an option

Frequently asked questions

Do I need workers' comp for one employee in Texas?

Not automatically — most private Texas employers can choose whether to carry coverage at any headcount, under Labor Code §406.002. But hiring your first employee is a trigger: if you stay uncovered, 28 TAC §110.103(b)(2) requires the no-coverage filing within 30 days of that hire (unless the date falls in the February 1 – April 30 window and you file then), plus the written employee notice at hire. And a governmental entity, government construction project, client contract, or trade license can remove the choice or require you to document it. Run the six-fact gate before deciding.

Does having five employees change the Texas rule?

Not the coverage rule — there is no five-employee coverage mandate in the Texas baseline. Five is a reporting threshold: a private nonsubscriber with at least five non-exempt employees must report qualifying injuries, illnesses, and fatalities to DWC on Form-007 by the seventh day of the following month. Smaller nonsubscribers still have the filing and notice duties in the timeline.

Can my employee sue me if I don't carry workers' comp in Texas?

Yes, and Texas removes three of the defenses you would otherwise have. Under Labor Code §406.033(a), an employer sued by an injured employee who is not covered cannot defend on the employee's contributory negligence, assumption of the risk, or the negligence of a fellow employee, and under §406.033(e) a pre-injury waiver signed by the employee is void. The employee must still prove your negligence (§406.033(d)); intentional self-injury and intoxication remain defenses (§406.033(c)); and §406.091(c) preserves the defenses as to statutorily exempt employees you do not cover. A subscribing employer, by contrast, generally has the exclusive-remedy protection of §408.001. Take your own situation to an employment or construction attorney.

What happens when I cancel my workers' comp policy in Texas?

Three separate clocks start, and they do not run from the same date. You file DWC Form-005 within 10 days after you notify the carrier (28 TAC §110.105(a)). Your termination takes effect on the later of the 30th day after DWC receives that notice or the policy cancellation date, and until that date coverage continues and you owe premium (§110.105(c)–(d)). And you give each employee written notice of the change within 15 days after the termination takes effect (§110.101(a)(2)). TDI's nonsubscriber page states the simpler version — that you become a nonsubscriber on the date the policy ends — so if the exact date matters to a client, a governmental entity, or an audit, confirm it with DWC at 800-252-7031. The full sequence is in the duty timeline.

Do owners or 1099 contractors count toward these duties?

Partly, and by statute rather than by label. Texas answers the owner question at §406.097 and the general-contractor/subcontractor question at §§406.122–406.123 — the rules and what they turn on are set out in worker boundaries. Whether a specific person falls inside any of them is a fact question, and on governmental-entity construction projects coverage attaches to people providing project services regardless of employee status. Put your actual facts to DWC or an attorney.

What do I need to collect from my subcontractors?

In Texas, a certificate of coverage before the first day on site, covering every date they work, in the entity name you actually pay. On a governmental building or construction project that is a legal duty under Texas law — §406.096(b) and 28 TAC §110.110 route the certificate from the sub to you and from you to the governmental entity. Everywhere else the reason is money: uncertified subcontractor payments are commonly charged to you as payroll at audit. The full checklist and the deadlines are in collecting sub certificates.

Can a client require workers' comp even though Texas law doesn't?

Yes. A contract — from a client, general contractor, landlord, venue, or lender — can require coverage, specific limits, and endorsements as a condition of the work, and can demand proof for its full duration. The actual current document controls, so extract its insurance clause before you bid or sign. The proof side of that workflow is covered in the certificate of insurance explainer.

How fast can I get a certificate of insurance after buying coverage?

There is no universal same-day answer. A certificate is commonly issued somewhere between the same day and a few business days after a policy binds, and the clock is set by the slowest dependency: complete quote inputs, underwriting review, payment or deposit, processing of any endorsements the contract requires, and the certificate-holder details from the requesting party. The certificate of insurance explainer owns that workflow.

How much does Texas workers' comp insurance cost?

This page publishes no premium figures; current dated samples live on the workers' comp insurance hub. Whatever sample you see anywhere is exactly that — a dated sample tied to a documented business profile, never an average or a guaranteed quote. Your price is set by your state, trade operations, payroll and headcount, claims history, chosen limits, and coverage route; the classification code assigned to your work is usually the single driver that moves the spread most, which is why the classification questions in the sections above are cost questions as well as compliance ones. The hub carries the full assumptions and quote inputs.

Verify before you file, buy, or send proof

The Texas answer is conditional, and now yours doesn't have to be: match your employer type and status to its matrix row, open the current DWC source or statute that row cites, and record the date you checked. Then take the one step your row points to — file the current DWC form through Employer E-File, quote legitimate coverage through the workers' comp insurance hub, collect the certificates your project or your audit will ask for, or send proof only after a valid policy and its required endorsements exist. If your facts touch a field this page marks Partial, Blocked, or Superseded, that is your cue to call DWC at 800-252-7031 before acting — not after.

Requirements, forms, statutes, and rules on this page verified 2026-08-08. Next scheduled review 2026-10-18, and immediately on any DWC page, form, rule, or statute change. Corrections: hello@covermytrade.com.

Sources and last verified date

Last verified: August 8, 2026

Next review: October 18, 2026

• Labor Code §406.002 — Texas Legislature — the statute making coverage elective for most private employers.
• Labor Code §406.033 — Texas Legislature — the common-law defenses a nonsubscriber loses when sued.
• Employer resources — Texas Department of Insurance, DWC — the governing agency's employer overview.
• Nonsubscriber requirements — Texas DWC — the notice, filing, and reporting duties of going without coverage.
• Employer FAQ — Texas DWC — the agency's own answers on elective coverage and duties.
• Coverage verification — Texas DWC — how to verify any employer's coverage status.
• DWC Form-005, employer notice of no coverage — Texas DWC — the nonsubscriber's annual state filing.
• DWC Form-007, injury report of a nonsubscriber — Texas DWC — the event-based injury report duty.
• DWC Notice 8 — Texas DWC — the required no-coverage workplace notice.
• Employer E-File — Texas DWC — the official filing portal for nonsubscriber forms.
• 28 TAC Chapter 110 — Texas Secretary of State — the DWC rules on employer notices and governmental-project coverage.
• Labor Code Ch. 406 (governmental construction projects, §406.096) — Texas Legislature — the contractor certification duty on public projects.
• Labor Code Ch. 504 — Texas Legislature — the political-subdivision coverage mandate.