Running a business means taking responsibility for people who work for you and the products or services that you provide to others. Insurance can play a very important role in protecting your business, its employees and its customers from losses while protecting your business from liability.

Business interruption insurance, premises liability insurance and even product liability insurance are all policies that may protect your company legally and financially. Workers’ compensation is another important form of insurance that covers the costs your employees incur if they are injured or develop a work-related illness. Do you have to carry workers’ compensation insurance as a Texas employer?

Texas is the only state that does not mandate workers’ compensation

A worker hurt on the job could lose out on thousands of dollars in wages and incur tens of thousands of dollars in medical costs. Workers’ compensation insurance helps protect injured and sick employees from financial hardship. It also helps protect the business itself from claims by those workers, who may desperately need financial resources because of their medical condition and current inability to work.

Unlike the other 49 states, Texas does not require employers to carry workers’ compensation insurance. Your company can choose to forego this coverage without violating state law. However, you will have to notify your workers about the lack of coverage. You also need to prepare for the financial risk of an injured worker.

Anyone who is injured at work could potentially bring a personal injury claim against the company. A single successful lawsuit could cost far more than workers’ compensation coverage. Weighing the risks based on your industry and your company’s financial solvency can help you make a good decision about whether or not to carry workers’ compensation coverage.