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Texas is the only state that lets most private employers choose whether to carry workers’ compensation insurance. For McKinney businesses, that choice has real consequences, and it helps to understand them before the next renewal.
Subscriber vs. Nonsubscriber at a Glance
| Topic | With Workers’ Comp | Without Workers’ Comp (Nonsubscriber) |
|---|---|---|
| Injury benefits | Paid through the workers’ comp system | Depend on any plan the employer sets up |
| Employee lawsuits | Generally limited for on-the-job injuries | Injured employees can sue for negligence |
| Common legal defenses | Not the main issue, since benefits are no-fault | Key defenses are generally unavailable |
Your Nonsubscriber Questions, Answered
Which defenses does a nonsubscriber lose?
Under the Texas Labor Code, a nonsubscribing employer sued by an injured employee generally can’t argue that the employee was partly at fault, that the employee assumed the risk of the job, or that a coworker caused the injury. Those limits can make negligence claims harder to defend.
Are there notice requirements?
Yes. Nonsubscribers generally must file an annual notice with the Texas Department of Insurance, Division of Workers’ Compensation, and inform employees in writing about their coverage status, including new hires.
Can employees agree in advance not to sue?
Texas law generally voids agreements that require employees to waive their rights before an injury occurs.
Are there jobs where coverage is required?
Yes. Certain public contracts, including many government construction projects, require workers’ comp coverage.
Options Nonsubscribers Often Consider
- Occupational accident coverage to provide defined injury benefits
- Employer’s liability coverage to help defend negligence lawsuits from employees
- A written injury benefit plan that explains how injuries will be handled
These options work differently from workers’ comp, so a Texas employment attorney should review any plan.
Our post on contract requirements and commercial insurance explains why clients may require coverage anyway. Amity Insurance Group in McKinney, TX can compare workers’ comp with nonsubscriber options. Policy terms vary. Businesses across McKinney, TX and Collin County can reach out to Amity Insurance Group or learn more about our commercial insurance options.
