If you have employees, the short answer is that you probably have to carry workers' compensation. The National Association of Insurance Commissioners (NAIC) states that coverage is mandatory for most employers in every state except Texas.
What workers' comp does
Workers' compensation pays benefits when an employee is hurt or made ill by the job. The NAIC says benefits typically include the employee's medical expenses, rehabilitation costs and at least some portion of their lost wages, plus a funeral benefit if an employee dies on the job.
The rule varies by state
The rule is a state law, so the details differ. Triple-I explains that an employer must have the coverage when there are more than a certain number of employees, and that the threshold varies by state. Check the number for your state.
The U.S. Department of Labor says people injured on the job at private companies or state and local government agencies should contact their state workers' compensation board. That board is also the place to ask what applies to you.
What Texas does differently
Texas lets employers opt in. The NAIC says Texas allows employers to opt in to providing coverage, and that employers who opt out can still be sued by injured workers. The Texas Department of Insurance says private employers can choose to carry workers' compensation, and that it is not required in most cases.
An employer without coverage still has duties. The Texas Department of Insurance says these employers, called nonsubscribers, must report to the state that they do not have coverage. They must also report to the Division of Workers' Compensation any work-related injuries resulting in more than one day of lost time, along with all work-related illnesses and deaths.
Choosing not to carry it is a real trade. The NAIC says an employer who opts out can be sued by an injured worker. Talk to a broker before you decide.
How to find out what applies to you
- Count your people. Ask your state agency whether part-time workers, owners, family members and contractors count.
- Call your state workers' compensation agency. It can tell you the employee threshold and any exceptions for your type of work.
- Ask your broker for a quote. Even where it is optional, get the price so you can compare it with the risk.
Why it is worth a second look
Even where coverage is optional, an injury at work can be costly, and an employee who is hurt may have nowhere else to turn for medical care or lost pay. Employers who skip coverage carry that risk directly, including the chance of being sued, as the NAIC notes. If you are in Texas and thinking of opting out, get a quote first, then decide with the price in front of you.
If you are somewhere else, the question is usually not whether to carry workers' compensation but how to get it at a fair price. A broker can quote it. If you have trouble finding coverage, ask your state workers' compensation agency what options exist where you operate, and ask more than one broker.
Is workers' comp required for a business with one employee?
It depends on the state. Triple-I says the threshold varies by state. Ask your state workers' compensation agency about your exact case.
Can a Texas employer skip workers' comp?
Most private employers can. The Texas Department of Insurance says it is not required in most cases, but employers without coverage must report that to the state and report certain injuries.
Updated October 9, 2026 to reflect substantive changes.
Insurance tips an owner can use.
Plain English. One short email a week.
Get The Brief