In Texas, choosing not to carry workers’ compensation changes what you can argue in court

Texas does not require most private employers to carry workers’ compensation, although important exceptions apply — including certain private employers performing work under government contracts. Section 406.002(a) of the Texas Labor Code provides that, except for public employers and as otherwise provided by law, an employer may elect to obtain workers’ compensation insurance coverage.

What that section gives, Section 406.033(a) takes back. In an action by an employee of a non-subscriber, it is not a defense that the employee was contributorily negligent, that the employee assumed the risk of injury, or that the injury was caused by the negligence of a fellow employee. All three classic defenses are removed at once.

For a plant with presses, CNC cells, forklifts and conveyors, that is the highest-stakes decision on this page. A manufacturer that opts out is not simply self-funding medical costs — it is accepting tort exposure with its three principal defenses already gone. Section 406.005 separately requires an employer to notify each employee whether or not it carries coverage.

This describes the statutory framework. Whether non-subscription is right for a specific employer is a legal and financial decision that belongs to counsel and to the employer’s own analysis.

Elsewhere in this ecosystem: Manufacturing · Resource Center · Operations · Coverage · Industry 4.0 · Glossary

For how these duties land on one specific operation, see precision machining, where guarding and energy control sit alongside the conformance records that answer a downstream defect claim.