Opening a gym or fitness center in Texas? You're probably focused on equipment, staff, and memberships. But here's what catches most new gym owners off guard: Texas has some unique requirements that don't exist in other states. The good news? Once you understand what's mandatory versus what's just smart business, you can protect yourself without breaking the bank.
Unlike most states, Texas doesn't require you to carry workers' compensation insurance. But before you celebrate those savings, there's a catch that could cost you far more if something goes wrong. Let's break down exactly what Texas requires, what's optional but critical, and how to make smart decisions that protect your business.
Texas Health Spa Registration: What You Need to Know
Here's something that surprises most gym owners: in Texas, your fitness center is legally classified as a "health spa." That might sound fancy, but it simply means any business that sells memberships for physical exercise programs. Whether you're running a 24-hour big-box gym, a boutique CrossFit box, or a martial arts studio, you fall under Chapter 702 of the Texas Occupations Code.
You must register with the Texas Secretary of State before you sell your first membership. This isn't optional. The registration costs $100 per location and renews annually. Each location needs its own separate certificate, so if you're planning multiple facilities, budget accordingly. Your registration expires exactly one year from the date of issuance, so mark your calendar.
The real financial requirement is the security bond. You'll need to post between $20,000 and $50,000 in security to protect your total membership base. The exact amount depends on your membership size and structure. You'll also need to submit sample contracts and proof of this security with your application. Some gyms qualify for exemptions if they're IRS-approved tax-exempt organizations, private clubs owned and operated by members, or government facilities. Most commercial gyms don't qualify for these exemptions, so plan on meeting the full requirements.
Workers' Compensation: Texas's Unique Approach
Texas is the only state where private employers can choose whether to carry workers' compensation insurance. This flexibility sounds appealing until you understand the trade-off. If you decide to skip workers' comp, you become what's called a "non-subscriber." As a non-subscriber, you lose the legal protections that shield most employers from employee lawsuits. That means if a trainer tears their ACL while demonstrating a squat, or a front desk employee slips on a wet floor and breaks their wrist, they can sue you directly for medical bills, lost wages, pain and suffering, and more.
If you choose to operate without workers' comp, you have specific legal obligations. You must file DWC Form-005 with the Texas Department of Insurance every year between February 1 and April 30. You must post notices in your workplace and provide written notice to every new employee that they're not covered. You must also report any work-related injury resulting in more than one day of lost time, plus all work-related illnesses and deaths. Miss these requirements, and you're opening yourself to penalties on top of lawsuit exposure.
The good news for 2025? Texas approved an 11.5% reduction in workers' compensation loss costs effective July 2025, making coverage more affordable than in previous years. For most gym owners, carrying workers' comp is the smarter choice. It limits your liability, protects your employees, and gives you peace of mind. The cost varies based on your payroll and employee classifications, but with the recent rate reduction, it's become more accessible for small fitness businesses.
General Liability Insurance: Not Required, But Essential
Texas doesn't legally require fitness centers to carry general liability insurance. But here's the reality: try leasing commercial space without it. Most landlords require proof of coverage before you sign a lease. Try getting equipment financing without it. Many lenders mandate it. The industry standard is $1 million per occurrence and $2 million aggregate, and that's what most contracts and leases will specify.
General liability covers the scenarios that keep gym owners up at night. A member trips over a kettlebell and breaks their ankle. Someone damages a parked car with your dumbbell they dropped in the parking lot. A guest at your facility files a claim after slipping on the locker room floor. These are third-party claims for bodily injury and property damage, and they happen more often than you'd think in a fitness environment. The average cost for gyms and fitness centers in Texas is around $69 per month, or $825 annually. That's remarkably affordable compared to the cost of defending even a minor slip-and-fall lawsuit.
Common claims at Texas fitness facilities include slip and fall accidents, injuries from improper technique or instruction, equipment malfunction, and overexertion injuries. Your general liability policy handles these third-party risks, but it doesn't cover claims arising from your professional services. That's where professional liability comes in.
Professional Liability for Personal Trainers
Professional liability insurance, sometimes called errors and omissions or malpractice insurance, protects against claims of professional negligence. If you give a client bad advice that leads to injury, or you fail to spot a dangerous form issue and they hurt themselves, professional liability covers your defense and damages. It's available up to $1 million per incident and $3 million aggregate for health and fitness businesses.
Here's a critical distinction many gym owners miss: if your trainers are W-2 employees, your facility's professional liability policy typically covers them. But if they're independent contractors receiving 1099s, they're usually not covered under your policy. Many gyms in Texas, from Austin to Houston to Dallas, require independent contractors to carry their own professional liability insurance before they can train clients. For trainers, this coverage starts around $189 per year in Texas, making it an affordable requirement.
Whether you employ trainers or contract with them, make sure someone's professional liability policy covers the training services being provided. This protects both your business and the trainers themselves from claims that could be financially devastating.
Getting Started: Your Action Plan
Start with your health spa registration. Contact the Texas Secretary of State, complete Form 3001, and prepare your security bond, sample membership contracts, and $100 registration fee. Don't sell memberships until your registration is approved. This is non-negotiable and violations can result in fines and legal complications.
Next, make your workers' compensation decision. If you have employees, seriously consider carrying coverage. The recent rate reduction makes it more affordable, and the lawsuit protection alone justifies the cost for most gyms. If you choose to go non-subscriber, set up your compliance calendar immediately. Missing the February 1 to April 30 filing window for DWC Form-005 creates unnecessary legal exposure.
Shop for general liability insurance before you sign your commercial lease. Get quotes for the standard $1 million per occurrence and $2 million aggregate coverage so you're ready when landlords or lenders ask for proof of insurance. Add professional liability coverage if you or your employees provide personal training or specialized instruction. If you work with independent contractor trainers, add a requirement to your contractor agreements that they maintain their own professional liability coverage and provide you with a certificate of insurance annually.
Running a fitness business in Texas gives you more flexibility than in most states, but that flexibility comes with responsibility. The gyms that thrive are the ones that understand the difference between what's legally required and what's practically necessary. Register properly, protect your employees, shield yourself from liability, and you'll build a foundation that lets you focus on what you do best: helping people get healthy and strong.
