How Nonsubscriber Workers’ Compensation Insurance Works in Texas

In Texas, workers’ compensation insurance is optional for most private employers. Employers who opt out, known as nonsubscribers, may take on direct legal and financial exposure that can threaten business continuity when a workplace injury occurs. Our team is here to explain what being a nonsubscriber entails and help you get the coverage you need.

What Does It Mean to Be a Nonsubscriber?

A non-subscriber is an employer who has chosen not to carry workers’ compensation coverage. This is a legal option in Texas, but it can come with trade-offs. Non-subscribing employers may lose the protection of the exclusive remedy doctrine, which can financially protect covered employers from injury lawsuits. Without that protection, workplace injuries can result in litigation, uncapped damages and prolonged legal costs.

Key Differences Between Subscribers and Nonsubscribers

Employers who subscribe to the Texas workers’ compensation system may receive a defined structure for handling claims. Non-subscribers may face different obligations and risks, including:

• No cap on employee lawsuit damages in most cases
• Loss of the assumption of risk, contributory negligence, and fellow-employee negligence defenses
• Obligation to file an annual notice of non-subscriber status, display notices of non-coverage, and provide written notice to each new employee hired
• Potential for higher litigation costs following workplace injuries
• Greater responsibility for managing the claims process internally

How We Can Help

At J.R. Carnahan Insurance Agency, we work with Texas employers to evaluate their coverage options, whether they are currently subscribed, not subscribed or reconsidering their approach. We can help identify occupational accident policies, employer liability coverage, and related policies that can address the gaps that non-subscriber employers face.

Contact our team to schedule a review of your current workers’ compensation strategy.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.