Texas General Contractor Workers' Compensation Insurance

Texas is the only state that does not require most private employers to carry workers' compensation. For a general contractor, that creates a trap: lenders and project owners still demand a policy, and if you use uninsured subcontractors, their injured workers can become your legal responsibility. A correctly structured workers' comp policy protects your business and unlocks projects that would otherwise be off-limits.

Does a Sub-Only GC Need Workers' Comp?

Yes, in most cases. Even if you have zero W2 employees, commercial project owners and lenders typically require a workers' comp policy before you can mobilize. Carriers write a "if any" policy — minimal premium, no payroll — that satisfies the contract requirement and activates the moment you hire or an uninsured sub is injured on your job. It is the cheapest way to stay eligible for Texas commercial work.

Owner Exclusion vs. Owner Inclusion

Sole proprietors and officers can often exclude themselves from workers' comp coverage in Texas. Excluding yourself lowers premium but means your own on-the-job injuries are not covered by the policy — they fall to your health insurance or your personal assets. Many GCs include the working owner for the medical-only protection and to satisfy lenders who want to see the principal covered.

Uninsured Subcontractor Exposure

When a 1099 subcontractor without workers' comp gets hurt on your project, Texas law can hold the GC responsible. Your workers' comp policy can be endorsed to respond to uninsured subs, but the premium for those exposures is charged at audit. Collecting a Certificate of Insurance showing each sub carries their own workers' comp removes that exposure from your audit and your premium.

Experience Modification Factor (EMR)

Once your policy crosses the threshold for experience rating, your claims history produces an Experience Modification Rate. An EMR below 1.0 lowers premium and is a bidding advantage on public work; an EMR above 1.0 raises premium and can disqualify you from some projects. Safe-site practices and prompt injury management are the two biggest EMR levers a GC controls.

What Project Owners Require

• Workers' comp with statutory Texas limits and employer liability of $1M/$1M/$1M
• Waiver of subrogation in favor of the owner and GC
• Coverage continuing through project closeout
• Proof via Certificate of Insurance before site access