Texas Workers' Comp Insurance for Nonprofits & Churches

Texas is the only state where workers' compensation coverage is optional for most private employers. A business that chooses not to carry it is called a non-subscriber, and there is no employee-count threshold that forces coverage for most private employers. The major exception is government building and construction contracts: a governmental entity's construction contract generally must require the contractor, and its subcontractors, to maintain workers' compensation coverage for the duration of the work. See the Texas Department of Insurance, Division of Workers' Compensation's employer guidance.

Common codes for this work include 8861 Charitable or Welfare Organization; 8864 Social Services Organization; 8810 Clerical Office Employees; 8869 Child Care Center. Texas uses NCCI class codes, so the codes below are the ones carriers typically assign to this work in Texas.

Because coverage itself is optional, Texas doesn't have the same automatic-inclusion rules other states use for owners; a subscribing employer's sole proprietor, partner, LLC member, or corporate officer generally needs to be specifically included on the policy to be covered, similar to an employee election in other states, and coverage details should be confirmed with the carrier. Non-subscribing owners take on the same civil-liability exposure described below for any workplace injury, including their own employees' claims.

Because coverage is optional for most private employers, there's no direct penalty simply for choosing not to subscribe. Instead, a non-subscribing employer loses key common-law defenses (such as contributory negligence, assumption of risk, and the fellow-servant rule) in a lawsuit brought by an injured employee, which significantly increases the employer's exposure to an uncapped jury verdict rather than a scheduled workers' comp benefit. Non-subscribers must give written notice to new hires about their non-covered status, and non-subscribers with five or more non-exempt employees must report qualifying injuries, illnesses, and fatalities to the Division on DWC Form-007 by the seventh day of the following month; failing to file that report or provide required notices can itself bring penalties.

Price is driven by payroll in each class code, the Texas rates filed for those codes, your claims history (experience modification), and underwriting factors such as total paid-staff payroll, separate from any volunteer activity; whether the organization runs a school, child care, or hands-on social-services program; split between office/administrative staff and program or facilities staff. We compare carriers so you can see what you qualify for.

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Workers' comp requirements are generally triggered by paid employees, so a church or nonprofit with any paid staff typically needs coverage for those employees regardless of how many volunteers also help out; volunteer coverage itself is a separate question under state law.

No — workers' comp requirements are based on having employees, not on the organization's tax-exempt or nonprofit status, so a 501(c)(3) with paid staff is generally subject to the same requirements as a for-profit employer.

The payroll for that program is often reported under its own classification — such as the child care or school classification — separate from the general clerical and program-staff codes used for the rest of the organization.

No, not in most cases. Texas is the only state where coverage is optional for most private employers; a business that opts out is called a non-subscriber.

A non-subscribing employer loses several standard legal defenses and can be sued directly by an injured employee for an uncapped jury award, instead of paying a scheduled workers' comp benefit.