Do oilfield contractors need workers comp in Texas?

Texas is the outlier. Section 406.002 of the Labor Code says that, except for public employers and as otherwise provided by law, "an employer may elect to obtain workers' compensation insurance coverage." TDI's own employer page says coverage "is not required in most cases."

Choosing not to carry it is not free of obligations, though:

• Notice to the state. Under § 406.004, an employer that does not obtain coverage must notify the Division of Workers' Compensation in writing, in the time and form set by rule. TDI handles this through its online employer filing.
• Notice to employees. Under § 406.005, every employer must tell new hires whether it has coverage, post a notice at the workplace, and notify employees within 15 days when coverage is obtained, terminated or canceled.
• Injury reporting. TDI says non-subscribers must report work-related injuries with more than one day of lost time, and occupational illnesses and deaths.

Comp is a trade: injured workers get benefits regardless of fault, and under § 408.001 those benefits are the exclusive remedy of a covered employee against the employer for a work injury (with a narrow exception for exemplary damages when an employee's death is caused by the employer's intentional act or gross negligence). A non-subscriber is outside that trade.

Under § 406.033, when an employee of a non-subscriber sues over a work injury, it is not a defense that the employee was contributorily negligent, assumed the risk, or was hurt by a co-worker's negligence. The employee still has to prove the employer was negligent, and the employer can still defend on the grounds the employee intended the injury or was intoxicated. Pre-injury waivers of the employee's claim are void, and post-injury waivers have strict conditions.

For a crew working around rigs, pressure, trucks and heavy iron, those are significant defenses to lose.

The operator's MSA is where comp becomes mandatory for you. Operators typically require statutory workers comp, employers liability (commonly $1M/$1M/$1M), and a waiver of subrogation in their favor. The reasons tie together:

• Knock-for-knock depends on it. Under a knock-for-knock clause, you take responsibility for injuries to your own people. Comp and employers liability are the insurance that pays for that promise.
• The waiver keeps the claim with you. Without a waiver of subrogation, your comp carrier could pay your worker and then sue the operator. In Texas that waiver is endorsement WC 42 03 04.
• Compliance platforms check for it. ISNetworld and Avetta reviews compare your certificate and endorsements to the operator's requirements, and a missing comp line is one of the quicker ways to get a failing grade.

Permian and Haynesville crews cross state lines all the time. The standard workers comp policy handles other states in two places on the information page:

• Item 3.A lists states where the policy's comp coverage applies as written.
• Item 3.C lists states for "other states insurance" (Part Three). If you begin work in a 3.C state after the policy starts and are not otherwise insured there, the policy applies as though that state were listed in 3.A. But if you already have work in a state not listed in 3.A on the policy's effective date, coverage for that state does not apply unless the insurer is notified within thirty days.

The practical rule: if you know you will work in New Mexico or Louisiana, get those states into 3.A at the start, not after the first claim. Texas law also has its own extraterritorial rule (§ 406.071) for employees hurt outside Texas who have significant contacts with Texas, but that does not replace coverage the other state may require. See Permian Basin and Haynesville for basin-specific notes.