If you run a Texas LLC, you are not legally required to carry workers compensation insurance. Texas is the only state where coverage is elective (optional) for private employers, and an LLC is a private employer, so no member count or employee count forces you to buy it. Whether you should carry it comes down to your employees, your contracts, and how much lawsuit exposure you are willing to hold yourself.
Who this is for: Owners of a Texas LLC, whether a single-member LLC with no staff, a multi-member LLC, or an LLC with a payroll of W-2 employees.
The short version
- A Texas LLC may choose to carry workers comp, but it is not required in most cases.
- LLC members are not named as a separate category in the Texas statute, so carriers handle them by policy endorsement (a written add-on to the policy that names who is on or off), choosing whether an owner is covered or left off.
- If you carry a policy, your W-2 employees are covered; owners are included unless the policy specifically excludes them.
- Opting out makes your LLC a non-subscriber that can be sued for negligence without its usual defenses.
- Many general contractors and commercial clients require an LLC to show proof of coverage before work starts.
How Texas treats LLC members
The Texas Workers' Compensation Act spells out how a sole proprietor, a partner, and a corporate officer are treated, but it does not list "LLC member" as its own category. In practice, carriers treat an LLC member or manager the way they treat a partner or an officer: the choice to cover that owner or leave them off is made on a policy endorsement (a written add-on to the policy). So the practical question is not whether the law names LLC members, it is whether your policy includes or excludes you as an owner.
That matters most for a single-member LLC with no other staff. If you have no employees and choose not to carry a policy, there is usually no one for comp to cover but you. If you take a policy so a client's contract is satisfied, you decide with your agent whether your own injuries are on the policy or excluded.
What changes when your LLC has employees
| Your LLC setup | Is comp required? | What owners and staff should know |
|---|---|---|
| Single-member, no employees | No | Often no one to cover but you; owner coverage is set by endorsement if you take a policy |
| Multi-member, no W-2 employees | No | Members included or excluded by endorsement; contracts often still ask for a policy |
| Any LLC with W-2 employees | No, but strongly advised | A policy covers employee injuries and gives you exclusive-remedy protection from lawsuits |
| LLC on a government construction contract | Yes | Every worker on the public project must be certified as covered |
The lawsuit trade-off
If your LLC opts out, it becomes a non-subscriber. A non-subscriber can be sued for negligence by an injured worker, and Texas law removes the three defenses an employer would normally use: that the worker was partly at fault, that the worker knew the risk, or that a co-worker caused the harm. Carrying a policy flips that around, because comp becomes the worker's exclusive remedy and generally blocks the lawsuit entirely. The limited liability in "LLC" protects your personal assets from many business debts, but it does not by itself answer an injured employee, which is a separate exposure comp is built to handle.
An Austin example
Illustrative, not a quote. A two-member electrical contracting LLC in Austin runs the business with one W-2 apprentice. The members do not want to pay premium on their own wages, so they ask their agent to exclude both owners by endorsement and cover only the apprentice. When a builder they want to work for requires proof of coverage, the LLC already has a policy in place and can show it the same day. If the apprentice is hurt pulling wire, the injury is covered and the LLC keeps its exclusive-remedy protection instead of facing a negligence claim it could not fully defend.
Real questions Texas owners ask
Does my Texas LLC have to carry workers comp?
In most cases, no. A Texas LLC is a private employer, and coverage is elective in Texas, so no member or employee count makes it mandatory. The main exception is work on a government building or construction contract.
Are LLC members covered by a workers comp policy?
It depends on the policy. Texas law does not name LLC members as a separate category, so carriers cover or exclude a member or manager by endorsement. You choose with your agent whether your own injuries are on the policy.
Do I need comp for a single-member LLC with no employees?
Usually not, because there is often no one to cover but yourself. If a client contract requires a policy, you can take one and decide by endorsement whether your own injuries are included or excluded.
Does having W-2 employees change things for my LLC?
It does not make comp legally required, but it raises the stakes. A policy covers employee injuries and gives your LLC exclusive-remedy protection, so an injured worker generally cannot sue the business for negligence.
Does the limited liability of an LLC protect me from an injured worker?
Not on its own. The LLC structure shields your personal assets from many business debts, but an injured employee is a separate exposure. Without workers comp, the LLC can still be sued for negligence as a non-subscriber.
Why do clients ask my LLC for proof of coverage?
General contractors, landlords, and commercial customers often require a certificate of coverage to manage their own risk. The state does not force you to buy comp, but you usually cannot take the contract without it.
Can I exclude myself but cover my employees?
Yes. A common setup is to exclude the LLC owners by endorsement while covering the W-2 staff. That keeps premium off owner wages while still protecting the business from employee-injury lawsuits.
Why Texas owners choose Morrow
- We shop the right market for you. Texas is the only state where workers' comp is optional for private employers, so Morrow helps you decide whether to subscribe or go without coverage, and places coverage fast through the competitive private market (or Texas Mutual, the insurer of last resort) when a client or public contract requires it.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Texas guides
Every Texas business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Texas (start here)
- Workers comp: the owner's overview
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Do sole proprietors need workers comp?
- What workers comp does not cover
- Texas electrician workers comp
This guide is general information, not legal advice. Texas rules and penalty amounts can change, so verify current requirements with Texas Department of Insurance, Division of Workers' Compensation (TDI-DWC) or a licensed advisor before you rely on them. Last updated: July 2026.