Texas-Specific · Insurance Term
Texas Non-Subscriber (Nonsubscription)
Definition
A Texas non-subscriber is a private employer that chooses not to carry workers' compensation insurance, which Texas allows for most private employers. In return, the employer can be sued by injured employees and loses key legal defenses, such as blaming the employee's own negligence.
In Plain English
Under Labor Code §406.002, workers' comp is elective for most private Texas employers. Non-subscribers do not pay workers' comp premiums, but an injured employee can sue them for negligence.
In those suits, §406.033 removes three defenses: that the employee was partly at fault, that the employee accepted the risk, and that a coworker caused the injury. That makes negligence suits harder to defend than in most other contexts.
Many non-subscribers buy occupational accident insurance and a separate employer liability policy to manage this risk. Non-subscribers must also file DWC Form-005 and post notices for employees.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical: a non-subscribing apartment owner's maintenance worker falls from a ladder and sues. The owner cannot argue the worker was careless. If the owner has no liability coverage for employee injuries, the cost of defense and any judgment comes from the business.
Why It Matters for Texas Property Owners
Non-subscription is largely a Texas concept. It is legal, but it is a real trade-off: lower insurance cost against greater lawsuit exposure. Some contracts and lenders also require workers' comp regardless.
What to Watch For
- File the required non-coverage notice with DWC and post employee notices.
- Check leases, management agreements and contracts for workers' comp requirements.
- Consider occupational accident and employer liability coverage if you do not subscribe.
- Talk to an attorney before setting up a non-subscriber benefit plan.
Common Questions
Is workers' comp required in Texas?
For most private employers, no. It is elective under Texas Labor Code §406.002, though public employers and some contracts require it.
What happens if an employee gets hurt and I am a non-subscriber?
The employee can sue you for negligence, and you lose the defenses of the employee's own negligence, assumption of risk and coworker negligence. Any coverage depends on the separate policies you buy.
Sources
- TDI: Nonsubscribers
- Texas Labor Code §406.002 (coverage generally elective)
- Texas Labor Code §406.033 (defenses lost by non-subscribers)
Last updated October 14, 2026 · Primesure editorial team · How We Write