Here’s a fact that surprises a lot of new San Antonio business owners: Texas is the only state in the country where workers’ compensation insurance is not mandatory for most private employers. You can legally run a business here — a shop, a restaurant, a contracting crew — without ever carrying it.
That doesn’t mean going without it is a good idea. It means Texas shifted the risk from a mandatory insurance requirement to something arguably more dangerous: full personal exposure to lawsuits.
What “non-subscriber” actually means
Businesses that skip workers’ comp are called “non-subscribers.” In exchange for not carrying the coverage, Texas strips away the legal protections that workers’ comp normally gives employers in every other state — specifically, the ability to use certain common-law defenses (like the employee’s own negligence contributing to the injury) if a hurt employee sues you.
In practice: if an employee is injured on the job and you’re a non-subscriber, they can sue you directly in civil court, for the full extent of damages — medical bills, lost wages, pain and suffering — with fewer defenses available to you than a subscribing employer would have. There’s no cap. A single serious injury claim without workers’ comp behind it has ended businesses.
What most San Antonio small businesses actually carry
For most of our local business clients — contractors, retail shops, restaurants, service businesses — the real-world answer is a combination:
- A Business Owner’s Policy (BOP) — bundles general liability (third-party injury or property damage claims) and commercial property coverage into one cost-effective policy. This is usually the foundation.
- Workers’ compensation — even though it’s optional in Texas, most businesses with employees who do any physical work (construction, food service, retail with lifting/stocking, anything involving vehicles or equipment) carry it anyway, because the lawsuit exposure of not carrying it usually outweighs the premium cost by a wide margin.
- Commercial auto — required if the business owns vehicles, and often overlooked for employees who drive their own vehicles for business errands.
The question that actually matters
It’s not “does Texas require this?” It’s “can my business absorb an uncapped lawsuit if someone gets hurt at work?” For the overwhelming majority of small businesses, the honest answer is no — which is why the “Texas doesn’t require it” fact tends to matter a lot less once owners see the real exposure spelled out.
Every business’s risk profile is different depending on what you do and how many people you employ. A quick conversation is the fastest way to find out what actually makes sense for yours — not a one-size-fits-all package.