Workers Compensation Insurance for General Contractors in Texas: Coverage, Costs, and Requirements

Workers compensation insurance covers your employees' work-related injuries and illnesses: medical treatment, lost wages, disability benefits, and death benefits. Texas is the only state that does not require private employers to carry workers compensation -- but general contractors in Texas must understand the significant risks of operating without coverage and the common contract requirements they face from clients and project owners.

Quick Answer

Estimated workers compensation premiums for Texas general contractors:

Business Size	Estimated Annual WC Premium
Small GC (1 to 5 employees)	$1,500 to $3,000 per year
Larger GC (6 or more employees)	$2,800 to $5,600 per year

Texas GC workers comp premiums reflect the physical risk of construction work. Actual premiums depend on payroll, employee classification codes, and experience modification factor.

What Workers Comp Covers for Texas General Contractors

Medical Treatment for Work Injuries

WC covers the cost of medical treatment for employees injured on the job -- emergency care, surgery, physical therapy, and ongoing treatment.

Lost Wages

WC pays a portion of an injured employee's wages during recovery. The benefit amount and duration depend on the severity of the injury and Texas's WC benefit schedule.

Permanent Disability

WC provides permanent partial or total disability benefits for employees whose injuries result in lasting impairment.

Death Benefits

WC pays death benefits to eligible dependents of employees who die from work-related injuries or illnesses.

Employer's Liability

Workers comp policies include an employer's liability section that covers lawsuits from employees claiming negligence beyond the WC system.

What Workers Comp Does Not Cover for Texas General Contractors

Subcontractor Injuries

WC covers your employees, not independent subcontractors. If your subcontractors carry their own WC, their employees are covered under the sub's policy. If a subcontractor does not carry WC, their employees may make claims against your policy at audit -- increasing your premium. Collect WC certificates from every subcontractor before work begins.

Third-Party Bodily Injury

WC does not cover bodily injury claims from non-employees -- visitors, passersby, or clients injured at your job site. General liability covers those third-party claims.

Property Damage

WC does not cover property damage. GL covers property damage claims.

Non-Work Injuries

WC covers work-related injuries only. Injuries that occur outside of work are not covered.

Texas-Specific Considerations

Texas Non-Subscriber System

Texas is the only state that does not require private employers to carry workers compensation. General contractors who opt out of WC (non-subscribers) must notify employees and the Texas Department of Insurance Division of Workers Compensation. Non-subscribers lose key legal protections: they cannot claim the employee negligence, fellow-servant, or assumed-risk defenses in injury lawsuits. A single serious injury lawsuit against a non-subscriber GC can exceed what WC premiums would have cost for years.

Client and Project Owner Contract Requirements

Most Texas project owners -- commercial real estate developers, government agencies, general contractors hiring subs -- require WC certificates as a condition of contract. Non-subscriber status may disqualify a GC from bidding on many projects. Check contract requirements before opting out of WC coverage.

Subcontractor Certificates

Texas GCs are responsible for verifying that their subcontractors carry WC. At audit, uninsured subcontractor payroll may be added to your policy, increasing your premium. Request and retain WC certificates for every sub on every project.

Experience Modification Factor

Texas GC WC premiums are affected by your experience modification factor (EMod). A clean claims history reduces your EMod below 1.0, lowering premiums. Frequent claims raise your EMod and increase premiums. Safety programs and injury prevention directly affect your WC cost.

Frequently Asked Questions

Is workers comp required for general contractors in Texas?

Texas does not require private employers to carry workers comp, but most client contracts and project owners require WC certificates. Non-subscriber GCs lose important legal defenses in injury lawsuits.

Does WC cover subcontractor injuries on my job site?

WC covers your employees. Subcontractors need their own WC. Uninsured subcontractor payroll may be added to your policy at audit. Collect WC certificates from all subcontractors.

What happens if one of my employees is injured and I don't have WC in Texas?

As a non-subscriber, you lose the ability to raise certain common-law defenses and may be fully liable for the employee's damages. An injured worker can sue a non-subscriber GC in civil court.

How much does workers comp cost for a Texas general contractor?

Texas small GCs typically pay $1,500 to $3,000 per year for WC coverage, depending on payroll, job type, and claims history.

Does WC cover injuries from subcontractors' employees?

Not directly. Subcontractors should carry their own WC. If they don't, their payroll may be added to your policy at audit.

Disclaimer

This article is for informational purposes only and does not constitute insurance or legal advice. Coverage details and costs vary by carrier and individual circumstances. Consult a licensed insurance agent and attorney for guidance specific to your situation.

Sources

• Texas Department of Insurance Division of Workers Compensation
• Insurance Information Institute
• National Roofing Contractors Association
• Associated General Contractors of America