Business insurance in Texas
Running a business in Texas means playing by rules no other state shares. Yours is the only state where workers' comp is optional — but opting out as a "nonsubscriber" strips away key legal defenses if an injured worker sues, so weighing coverage is a real decision, not a formality. Add Gulf Coast windstorm exposure, a reputation for large commercial-auto verdicts, and contract-driven coverage demands, and your insurance stack deserves more than a rubber stamp. Here's what every Texas owner should line up before binding.
This is an independent guide from QuoteSweep, which maps the modern commercial insurance landscape.
Texas requirements at a glance
- Workers' comp
- Optional for most private employers — Texas is the only state that does not mandate workers' comp. Employers who opt out ('nonsubscribers') must file DWC Form-005 annually (between February 1 and April 30) and give/post written notice of no coverage to employees. Nonsubscribers with 5+ employees have an additional obligation: reporting work-related injuries/illnesses monthly via DWC Form-007. Coverage is mandatory only in narrow cases, e.g., building/construction contracts with a governmental entity (Texas Labor Code § 406.096).
- WC market
- Competitive — private insurers available
- Min. auto liability
- 30/60/25 ($30,000 bodily injury per person / $60,000 per accident / $25,000 property damage)
- State regulator
- Texas Department of Insurance (TDI); workers' comp is administered by its Division of Workers' Compensation (DWC)
What businesses in Texas need
Most Texas businesses build coverage from a few core lines. Texas is the only state where workers' comp is optional, but "nonsubscribers" forfeit the common-law defenses of contributory negligence, assumption of risk, and the fellow-servant doctrine, so an injured employee can sue directly — making liability exposure a real strategic decision. Gulf Coast businesses also face significant hurricane and windstorm exposure (wind/hail is often excluded from standard property policies, with coverage available via the Texas Windstorm Insurance Association, TWIA), plus a reputation for large commercial-auto ("nuclear") verdicts.
- • General liability — third-party injury and property-damage claims. See the cost guide.
- • Business owner's policy (BOP) — bundles liability and property. See the BOP cost guide.
- • Workers' compensation — Optional for most private employers — Texas is the only state that does not mandate workers' comp. Employers who opt out ('nonsubscribers') must file DWC Form-005 annually (between February 1 and April 30) and give/post written notice of no coverage to employees. Nonsubscribers with 5+ employees have an additional obligation: reporting work-related injuries/illnesses monthly via DWC Form-007. Coverage is mandatory only in narrow cases, e.g., building/construction contracts with a governmental entity (Texas Labor Code § 406.096). See is workers' comp required.
- • Commercial auto — required for business vehicles (Texas minimum: 30/60/25 ($30,000 bodily injury per person / $60,000 per accident / $25,000 property damage)).
- • Professional liability (E&O) and cyber — for advice-based and data-handling businesses.
Not sure where to start? See do I need business insurance and how much it costs.
Modern brokerages for Texas businesses
These modern brokerages cover businesses in Texas and quote online — matched to the kind of business you run:
Kinro
AI-assisted small-business brokerage — fast general liability, BOP, and workers' comp for simpler service and trade businesses.
Panta
Tech-enabled surplus-lines (E&S) brokerage for harder-to-place trades, construction, trucking, and manufacturing risk.
Harper
AI-native brokerage with deep specialty and E&S market access for complex or professional risk (E&O, cyber, umbrella).
Frequently asked questions
Do I have to carry workers' compensation for my Texas business?
No. Texas is the only state where workers' comp is optional for most private employers. You can go without it as a "nonsubscriber," but if you have five or more employees you must file DWC Form-005 with the Division of Workers' Compensation each year and post/deliver notice of no coverage. The trade-off: nonsubscribers lose the legal defenses of contributory negligence, assumption of risk, and the fellow-servant rule, so an injured worker can sue you directly. Coverage can still be required contractually — for example, building or construction contracts with a governmental entity.
What are the minimum auto liability limits for my company vehicles in Texas?
Texas requires at least 30/60/25 in liability coverage: $30,000 for bodily injury per person, $60,000 total per accident, and $25,000 for property damage. That statutory floor has been unchanged since 2011. For business-owned or commercial vehicles, insurers and contracts typically call for far higher limits (often a $1M combined single limit), so confirm exact commercial-auto requirements with the Texas Department of Insurance or the Texas DMV.
Want Google to show you more from QuoteSweep? Add QuoteSweep as a preferred source.
Related
Compare modern insurers on the insurtech landscape, or browse business insurance by state.