Workers' Comp & Auto · Insurance Term
Workers' Compensation Insurance (Workman's Comp)
Definition
Workers' compensation insurance pays medical bills and lost wages for employees injured on the job, regardless of fault. In exchange, it generally protects the employer from most employee injury lawsuits. In Texas, most private employers can choose whether to carry it.
In Plain English
A workers' comp policy has two parts. Part one pays benefits required by state law. Part two, employers liability, covers lawsuits by employees that fall outside the comp system.
Premiums are based on payroll, classification codes and your experience modification rate. Payroll is checked after the policy period through a premium audit.
In Texas, employers that don't carry it are called non-subscribers and lose key legal defenses in employee injury suits.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical: a maintenance worker at your apartment complex injures their back lifting a water heater. Workers' comp pays medical costs and partial lost wages under Texas rules, and the employee generally cannot sue you for negligence.
Why It Matters for Texas Property Owners
Under Texas Labor Code §406.002, most private employers can choose not to carry workers' comp. Non-subscribers lose defenses like contributory negligence and must file DWC Form-005.
What to Watch For
- Decide whether to carry coverage or be a non-subscriber, and understand the trade-offs.
- Check contracts and leases that may require workers' comp.
- Keep payroll records accurate for the premium audit.
- Report injuries to your insurer promptly.
Common Questions
Do I need workers' comp in Texas?
Most private employers are not required to carry it, but many choose to. Without it, you lose important defenses if an employee sues.
Can my property manager's workers' comp cover my maintenance staff?
Only if they are the manager's employees. If staff are on your payroll, your own coverage decision applies.
Sources
Last updated October 14, 2026 · Primesure editorial team · How We Write