Small-business cover in Texas.
Workers’ comp threshold in Texas: Workers' comp is generally optional for private employers (Texas is the only state where private-sector employers may opt out)[S].
Updated 2026-05-16 · Beaconcover editorialThe short answer: Texas is the only state that lets private employers choose whether to carry workers' compensation, so most small businesses there start with the general liability that clients and licenses ask for before you can take a job.
What does Texas require?
Workers' comp is generally optional for private employers (Texas is the only state where private-sector employers may opt out)[C]
Texas is the only state where private employers may opt out of workers' compensation (non-subscriber status), though doing so removes key liability protections. Public employers and employers with a building or construction contract with a governmental entity must provide coverage. Many contractor and trade licenses are issued at the state or municipal level. Regulated by the Texas Department of Insurance.
What licensing and bonding does Texas require?
- Non-subscribers give up the lawsuit protection a workers' comp policy gives an employer
- Electrical and some trades require state licensing; many trades licensed locally