Moon Insurance Managers, Inc. · TDI license #5595
Workers’ Compensation Insurance in Houston, TX
Texas is the one state where workers’ compensation is optional for most private employers. That fact is on every brochure. What the brochures skip is what “optional” costs the day an employee is hurt — and it is spelled out in the Labor Code, not in anybody’s sales copy.
What the statute does if you go without
- Coverage
- Elective, § 406.002
- Common-law defenses
- Barred, § 406.033
- Employee must prove
- Ordinary negligence
- A pre-injury waiver
- Void by statute
- Non-subscriber filing
- DWC-005, 1 Feb – 30 Apr
- 41years in Houston
- 20+markets compared
- Same dayDPS filing
- #5595TDI license
The employee’s side
What workers’ comp pays for
Three things, and they are the straightforward half of the product:
- Medical care Treatment
- Care for injuries and illnesses that come from the job, delivered under a system the Texas Division of Workers’ Compensation regulates rather than one the employer negotiates after the fact.
- Part of lost wages Income benefits
- Income benefits while an injured employee cannot work. Part of the wage, not all of it — the percentages and caps are DWC’s and they move, so ask rather than plan around a number you read somewhere.
- Death benefits The worst case
- Burial expenses and benefits to the employee’s family. It is the coverage nobody wants to price and the one that decides whether a bad day ends a business.
The employer’s side is a legal protection rather than a benefit, and it is the half Texas makes interesting.
What the Labor Code actually says
Optional in Texas — here is what that actually means
Labor Code § 406.002 says a private employer may elect to carry workers’ compensation. Electing out is lawful, and anyone who tells you otherwise has not read it. It is also a trade, and the code states both sides of that trade plainly.
| Criterion | If you carry it | If you elect out |
|---|---|---|
| If an employee is hurt and sues | Benefits under the policy are generally their exclusive remedy | They can sue you for damages |
| The three defenses employers reach for first | The exclusive-remedy bar applies instead | Unavailable — you cannot argue the employee’s own carelessness, that they accepted a known risk, or that a co-worker was at fault |
| What the employee has to prove | That the injury was work-related | Ordinary negligence, and nothing more |
| A waiver signed before the injury | Not something the policy needs | Void — the statute says so outright |
| A cap on what a court can award | The bar is the protection | None |
| The exception worth knowing exactly | A family can still seek exemplary damages where gross negligence or an intentional act caused a death | — |
| Annual paperwork with the state | Ordinary policy administration | DWC Form-005, filed between 1 February and 30 April every year |
That is the whole optional-in-Texas story, taken from the code itself: skip the premium, keep the courtroom. Worth stating the exception exactly rather than softening it, because it is the one competitors get wrong in both directions — carrying coverage does not make an employer untouchable, and the exception is narrow: the family of an employee who dies because of an employer’s gross negligence or intentional act can still seek exemplary damages.
Sources: Tex. Labor Code ch. 406 — §§ 406.002, 406.033; Tex. Labor Code § 408.001 — exclusive remedy. Verified .
Non-subscriber duties
Going without still comes with homework
Choosing not to carry workers’ comp does not take you off the state’s books. It puts you on them as a non-subscriber, with duties attached:
- File with DWC every year. Non-subscribers file DWC Form-005 between 1 February and 30 April, and again whenever they first drop or decline coverage. Missing the filing is an administrative violation under § 406.004.
- Post notices and tell new hires in writing. Notices go up in the workplace, and every new employee is told in writing that they are not covered by workers’ compensation.
- Report injuries to DWC. Work injuries involving more than a day of lost time, occupational illnesses, and deaths.
We say this whichever way you are leaning, because it is the part nobody mentions until it is late. Plenty of owners who came in certain they would stay non-subscribers changed their minds at the second bullet.
Source: TDI / DWC — employer resources and non-subscriber requirements. Verified .
Two doors close
When it stops being optional
Government work. A governmental entity’s building or construction contract must require workers’ compensation for every worker on the project, and the requirement flows down to every subcontractor (§ 406.096). Bidding city, county, school-district or state building work means carrying it, full stop.
Private contracts. General contractors, clients and staffing agreements demand coverage every day for reasons of their own. In practice your contract usually settles the question before the law gets to it.
If you are a trade weighing this against a bid, the liability half of your paperwork lives on our contractors general liability page.
Source: Tex. Labor Code § 406.096 — public building and construction contracts. Verified .
Fixable
A lapsed policy is ordinary work
People type workers comp lapse into a search box at eleven at night, so here is the honest answer. From the day a policy lapses you are a non-subscriber — the exposure above applies and the DWC filing duty starts. Some carriers also read a lapse as a warning sign and price it that way.
Both problems are ordinary and both are fixable. Bring us the notice, tell us what happened, and we go to the markets that will look at the whole story rather than the one line. Nobody here treats a lapse as a character flaw.
The same goes for payrolls the standard market prices badly — a claim in the history, a tough class code, a new venture with no track record. Placing the account that got a hard no somewhere else is the work an independent desk exists for.
Read the fine print
Real workers’ comp vs. “alternatives”
Some sellers pitch non-subscriber “injury benefit plans”, or coverage from companies not licensed in Texas. The Texas Department of Insurance is blunt about these: an alternative policy bought from an unlicensed company does not count as workers’ compensation under state law. You keep the lawsuit exposure, benefits are limited to whatever the contract says, and there is no state guaranty backing behind it.
And if you have been declined everywhere, Texas keeps a door open: Texas Mutual was created by the legislature as the insurer of last resort, and an employer who cannot find coverage elsewhere can buy from it. We will tell you honestly which path fits before you spend another afternoon on hold.
Source: TDI — workers’ compensation insurance (cb030). Verified .
No obligation
Cover the people, keep the protection
Headcount, payroll, and what the business actually does — that is what a quote needs. Bring those and we will bring the markets.
Once the policy is placed, your certificates come from the same desk: certificate of insurance requests.
Monday to Thursday, 9:00 to 5:00; Friday, 9:00 to 4:00. 360 FM 1959, Houston, TX 77034. Policies written statewide — you do not have to be local.
Workers’ comp questions we get every week
Is workers’ compensation required in Texas?
For most private employers, no — coverage is elective under Labor Code § 406.002. But a governmental entity’s building or construction contract has to require it for every worker on the project, many private contracts demand it, and electing out means losing key legal defenses if an employee is hurt and sues.
What happens if an employee is hurt and I don’t have workers’ comp?
The employee can sue you for damages. Under § 406.033 you cannot argue their own carelessness, their acceptance of the risk, or a co-worker’s fault — the employee needs to prove only ordinary negligence, and a waiver signed before the injury does not hold. With coverage in place, benefits are generally the exclusive remedy instead.
Do owners and officers have to be covered?
Texas lets certain executives and business owners make their own election about being included in coverage. The mechanics depend on how the business is set up, which makes it a two-minute question on the phone and a bad one to guess at from a web page.
Does my staffing agency, trucking company, or restaurant need workers’ comp?
Usually your contracts answer before the law does — clients, shippers, staffing agreements and franchise agreements require it routinely. What the industry changes is the class codes and the pricing, not the legal framework. Tell us what the business does and we quote it accordingly.
How fast can I get proof of coverage for a contract?
Tell us the deadline the contract set and we work to it. Quoting needs your headcount, your payroll and what the business does; certificates come from the same desk once the policy is placed.