Texas Business Insurance Requirements

Is business insurance required in Texas?

Texas is unusual: most private employers are not required to carry workers' compensation. That makes Texas the main exception to the national rule. Other coverage is mostly required by contracts:

• Clients and general contractors commonly require general liability and often require workers' comp from subcontractors anyway.
• Commercial landlords usually require general liability.
• Government contracts: businesses that contract with government entities, such as on public building or construction projects, must provide workers' comp coverage for their employees on those projects.
• Vehicles registered in Texas need auto insurance, and business vehicles belong on a commercial policy.

General liability isn't required by Texas law for most businesses, but it's needed to win most commercial work.

Workers' compensation in Texas

Texas employers can choose whether to carry workers' compensation. Employers without coverage are called non-subscribers, and the choice comes with obligations and risks:

• Notice to the state. Non-subscribers must file a notice with the Texas Department of Insurance, Division of Workers' Compensation.
• Notice to employees. Non-subscribers must tell employees they don't have coverage, both when hiring and with posted notices at the workplace.
• Lost defenses. An injured employee can sue a non-subscriber directly, and the employer generally can't use common defenses such as claiming the employee was partly at fault or that a co-worker caused the injury.

Some non-subscribers buy an employer's liability or occupational injury policy instead. Whether that's a good fit depends on your risk; discuss it with a licensed agent. Workers' comp, by contrast, generally limits an employee's right to sue in exchange for guaranteed benefits.

What else Texas business owners should know

• Hail and wind. Large parts of Texas see frequent hail and windstorms. Property and BOP policies may have separate wind or hail deductibles, so compare deductibles, not just premiums.
• Coastal areas. Businesses near the Gulf Coast should ask how windstorm coverage is handled, since it may be excluded or offered separately in some coastal areas.
• Construction and energy work. Many general contractors and project owners in Texas require workers' comp from subcontractors regardless of the state's opt-out rule.
• Vehicles. Long driving distances mean many businesses use vehicles heavily. Review commercial auto or hired and non-owned auto (HNOA) coverage if you or employees drive for work.

How much does business insurance cost in Texas?

We don't publish a Texas-specific median, because reliable state-level price data isn't publicly available. What we can share are national medians. According to Insureon's 2026 data from 100,000 small-business customers (most with 1–4 employees):

Prices in Texas can be higher or lower than these figures. Hail and wind exposure, coastal location and the size of the metro area you work in can all affect Texas premiums. Your own quote depends on your industry, payroll, revenue, number of employees, claims history, the limits and deductible you choose, and where in the state you operate. Riskier work costs more: Insureon's construction customers, for example, pay a median of $82 a month for general liability and $254 a month for workers' comp, compared with $29 and $40 for consultants. Use our business insurance cost calculator for a rough national estimate, then get real quotes.

How to verify requirements and coverage in Texas

1. Check workers' comp rules with the state. The Texas Department of Insurance, Division of Workers' Compensation is the authority on who must carry coverage, exemptions and penalties. Our workers' comp requirements by state table is a starting point, not a substitute.
2. Check your license. If your trade is licensed in Texas, the licensing board can tell you whether proof of liability insurance, a bond or workers' comp is part of getting or renewing your license.
3. Read your contracts and lease. Clients, general contractors, venues and landlords set their own minimums, often $1 million per occurrence and $2 million aggregate for general liability, and may ask to be named as an additional insured.
4. Confirm the insurer is licensed. The Texas Department of Insurance regulates insurance companies and agents in Texas. You can use its website to check that an insurer or agent is licensed and to file a complaint.
5. Keep proof handy. Ask for a certificate of insurance (COI) as soon as your policy starts so you can send it to clients quickly.