There are 2.8 million small businesses in Texas. Collectively, these 2.8 million businesses employ 4.8 million workers. If these workers are injured in their jobs, workers compensation insurance will pay for their medical costs and lost wages. Without workers compensation insurance, either small businesses have to pay for these expenses or workers have to pay for them out of their pockets. That is how critical workers compensation insurance is to the financial well-being of these workers and their companies. However, Texas is the only state that doesn’t require workers compensation insurance. It is optional. However, you still should have it to protect your business and the financial well-being of your employees if and when they get injured at work. We explain the details and recommend the 4 best workers compensation insurance in Texas for your consideration.
- 4 best workers compensation insurance companies in Texas
- Workers compensation laws in Texas
- What does workers compensation insurance cover?
- What doesn’t workers compensation insurance cover?
- How much does workers compensation insurance cost in Texas?
- How to find cheap workers compensation insurance in Texas?
- How is workers compensation Insurance different that general liability insurance?
4 best workers compensation insurance companies in Texas in 2022
We research ~20 companies offering workers compensation insurance in Texas and here are our recommendation of the top 4 providers for your consideration.
- CoverWallet: Best for comparing online quotes
- Pie: Best for fast online quotes
- Progressive Commercial: Best if you also need commercial auto insurance
- Travelers: Best workers compensation insurance for midsize businesses in Texas
CoverWallet: Best for comparing online quotes
If you are looking for workers compensation insurance in Texas and want to do comparison shopping for a cheap policy, CoverWallet is a good place to start.
CoverWallet is a digital broker, not an insurer. They work with several insurance companies. Once you provide them with your information, they are able to pull several quotes from their partner companies so that you can compare and select the best and cheapest one for your company.
Below is an example of quotes that we receive from CoverWallet for a restaurant located in Houston, Texas with 7 full time employees and annual payroll of $550,000.
CoverWallet was able to provide us with three quotes from their partner companies: Guard, AmTrust, and Chubb. For the restaurant in Houston, Guard’s quote is the lowest. However, this doesn’t mean Guard always provides the cheapest quote. This might be entirely different for your company, so be sure to shop around with a few and compare several quotes on CoverWallet.
Once you’ve got your quote, you can purchase a policy online, or be connected to an agent. After buying a quote through CoverWallet, you can use this digital dashboard to manage your policies 100% digitally. You can download the certificate of insurance, file a claim, or renew the policy, and more.
They recommend other types of business insurance for you, too. They are licenses in all 50 states, so wherever you live, you can get a quote.
Pie: Best for fast online quotes
Pie is a popular insuretech startup focused on providing cheap workers compensation insurance to small businesses. They claim to offer up to 30% discount compared to the regular prices offered by other legacy insurance companies.
Getting a quote and buying a workers compensation insurance policy from Pie are as easy as eating a pie. That turns out to be very true in our own experience. Within 3 minutes, we are able to pull a quote from Pie. And if we proceeded to buying the policy, it would take us less than 5 minutes.
As you see above, different insurance companies offer different prices. The price difference among the insurance companies can be substantial. So make sure you shop around to find the cheapest quote for your company.
Although Pie is a startup, their policies are underwritten by Sirius Group, who earns an A- rating by AM Best. This is quite reassuring. They also have good customer satisfaction rating, earning 4.6/5 on Trustpilot with hundreds of reviews and ratings.
Progressive Commercial: Best if you also need commercial auto insurance
Progressive is a popular name in the auto insurance industry, both personal auto and commercial auto. They are actually one of the biggest commercial auto insurance providers and offer quite competitive prices. If you need commercial auto insurance, you should definitely get a quote from them.
They also offer other business insurance policies for small businesses such as general liability insurance, professional liability insurance, and workers compensation insurance. You can bundle your workers compensation insurance with commercial auto insurance policies from Progressive and enjoy some significant discounts on both policies.
Travelers: Best workers compensation insurance for midsize companies in Texas
Travelers is the biggest providers of workers compensation insurance in the US, commanding 7.3% market share. They have massive experience in underwriting and servicing workers compensation insurance.
Travelers provides a comprehensive list of business insurance policies and caters to businesses in all industries. Regardless your business size and needs, Travelers should have insurance policies that meet your requirements. However, Travelers sell their business insurance policies through their agent network. They don’t sell their policies online yet.
If you run a midsize business and might require more than just workers compensation insurance, Travelers might be a good option for you. They will assign a dedicated agent to consult and service your growing need of business insurance.
Workers compensation laws in Texas
Texas is the only state that doesn’t require workers compensation insurance. It’s optional. Only commercial auto insurance is required for businesses in Texas.
Only businesses that contract with any government entity are required to carry workers compensation insurance.
Let us stress that it’s still a good idea to have it. According to a study from the National Center for State Courts, the median combined cost of both parties involved in a workers compensation law suits is $88,000. This can put a toll or even bankrupt a small business.
In addition, Texas has some of the cheapest rates in the country for workers comp, so there’s really no reason not to get it.
What does workers compensation insurance cover?
Workers compensation insurance protects your employees just in case they are injured on the job. It covers:
- Medical expenses
- Death benefits
- Missed wages
- Vocational training
Vocational training covers education if your employee can no longer do the job they were hired to do.
Workers compensation will cover your court costs and any settlements if the injured employee decides to sue you. If the worst happens and an employee dies while on the job, workers compensation n covers the funeral and burial expenses. It also provides a settlement to the victim’s family.
Keep in mind that diseases employees were exposed to while at work can also be covered under workers compensation. Carpal tunnel syndrome for office workers and black lung disease for coal miners are two well-known occupational hazards that can be covered by workers compensation insurance.
What doesn’t workers compensation insurance cover?
Workers’ compensation doesn’t cover everything. It won’t cover:
- Independent contractor injuries
- Client injuries
- Employees who are intoxicated or high
- Wages for temporary workers while the worker recovers
- OSHA fines
- Injuries that occur after the employee has left work (assuming they’re not doing something under the scope of employment)
- Vandalism or intentional injuries
How much does workers compensation insurance cost in Texas?
The cost of workers compensation insurance in Texas varies according to:
- Amount of payroll
- Claims history
- Number of employees
- Coverage limits
- Level of risk
If you want to calculate your workers compensation costs in Texas, it’s $0.55 per $100 of payroll, on average according to to the National Academy of Social Insurance. You then multiply this by class code, which is how the insurance industry categorizes workers, and then that’s multiplied by an experience modification rate, which is how your business compares to other businesses. Costs of workers compensation insurance tend to go down over time because of experience, unless you have a claim.
If you want to reduce the cost of workers compensation insurance for your business, make sure you shop around with at least 3 companies or with a digital broker like CoverWallet to compare several quotes and select the cheapest one for you.
How to find cheap workers compensation insurance in Texas?
Finding cheap workers’ compensation insurance in Texas really depends on your claims history, your payroll, and your industry. It’s always possible to find different rates, especially if you choose an insurer that focuses solely on covering workers’ compensation, like Pie Insurance.
Make sure to shop with at least 3-5 companies or a digital broker like CoverWallet to compare several quotes before selecting the cheapest one for you. Different insurance companies will provide you with different rates, so always shop around to compare.
Some insurance companies will provide discounts for having safety policies and return-to-work policies in place. Make sure to always ask for any discount program that the insurance company might have in place. You may get a discount if you choose to bundle multiple insurance policies with the same insurer.
Lastly, the cost of worker compensation insurance depends on the classification codes of your employees. Construction workers have much more expensive workers compensation insurance than clerical workers, so make sure you classify your employees into the correct codes and remember to update the codes when your employees change the nature of their work.
Who is exempt from workers compensation insurance in Texas?
Texas is the only state in the country that doesn’t require workers compensation insurance, except for private companies who are contracted to do work for the government. It is optional for employers in the Texas state. However, majority of employers in Texas still carry it because it is probably the most important coverage for workers.
In principle, all employers in Texas, except private companies that are contracted to work for the government, are exempt from workers comp insurance.
Who is required to have workers comp insurance in Texas?
As mentioned above, only private companies who are contracted to work for the government are required to have workers comp insurance.
Other companies, either in private or public sectors, can consider workers comp insurance optional. It is the most important coverage to protect your employees, so majority of companies in Texas still carry workers comp insurance.
How is workers compensation Insurance different that general liability insurance?
Workers compensation insurance only covers people who work for you. If your client or a customer or even a random passerby is injured on your jobsite, general liability insurance will cover that. General liability insurance covers bodily injury and third-party property damage against you, the business owner.
Although no one wants to pay a lot of money for workers compensation insurance, the cost of not having it is exponentially more. Make sure you run a safe workplace, and hopefully you won’t have any claims filed against you.