If you're running a home healthcare agency in Texas, you're navigating a unique insurance landscape. Texas is one of only two states where workers' compensation insurance isn't mandatory for most employers—which sounds like good news until you realize what that actually means for liability. Meanwhile, your clients and facilities likely have their own insurance requirements that you'll need to meet. Let's break down what you actually need to operate legally and protect your business.
Getting Licensed: Your First Hurdle
Before you worry about insurance, you need to get licensed. In Texas, home healthcare agencies operate under the Home and Community Support Services Agencies (HCSSA) category, regulated by the Texas Health and Human Services Commission (HHSC). You'll submit your application through the TULIP online portal using Form 2021.
Here's what trips people up: after you get your initial license, you have six months to enroll your first client and request an initial health survey. Miss that window, and you're starting over. Your administrator and alternate administrator also need specific qualifications—healthcare experience, management background, or relevant degrees—plus they must pass background checks. The regulations are outlined in Chapter 558 of the Texas Administrative Code, and HHSC is currently updating these rules to reflect recent legislative changes from SB 463 and SB 240.
Workers' Compensation: Optional But Not Really
Texas doesn't require most private employers to carry workers' compensation insurance. Sounds great, right? Not so fast. If you choose not to carry workers' comp and an employee gets injured on the job, you lose all your common law defenses. That means they can sue you directly for the full cost of medical bills, lost wages, pain and suffering—the works. There's no cap on what you could owe.
For home healthcare agencies, this is especially risky. Your employees are helping clients transfer from beds to wheelchairs, lifting patients, handling medical equipment, and driving between homes. Back injuries, slip-and-falls, auto accidents—these happen regularly in this industry. The average workers' comp policy for home healthcare runs about $154 per month or $1,847 annually. That's cheap insurance against a lawsuit that could bankrupt your business.
The standard classification code for home healthcare workers is 8835, which covers home health aides, personal care providers, companion care, and traveling healthcare workers. Rates typically run around $2.79 per $100 of payroll. So if you're paying $50,000 in annual wages, you're looking at roughly $1,395 in workers' comp premiums. That's manageable, and it protects both your employees and your business.
General Liability: What Your Clients Demand
Texas doesn't mandate general liability insurance for home healthcare agencies, but try getting a contract without it. Hospitals, nursing facilities, insurance companies, and private clients routinely require proof of coverage before they'll work with you. The standard minimums they ask for are $1 million per occurrence and $2 million aggregate.
General liability covers third-party bodily injury and property damage. If your aide accidentally knocks over an expensive vase in a client's home, that's covered. If a client's family member trips over your employee's medical bag and breaks an ankle, that's covered. The average cost runs about $25 per month or $295 annually for home healthcare providers—incredibly affordable for the protection it provides.
Professional Liability: Protecting Against Malpractice Claims
This is where things get more expensive, but it's non-negotiable. Professional liability insurance (also called errors and omissions or malpractice insurance) covers claims related to the actual healthcare services you provide. If your aide gives medication at the wrong time, misses signs of a deteriorating condition, or makes an error in wound care, professional liability steps in.
Standard coverage limits are $1 million per occurrence and $3 million aggregate. Unlike general liability, professional liability claims can be massive. A medication error leading to hospitalization or death can result in settlements or judgments in the millions. This coverage typically costs more than general liability, but it's essential for anyone providing medical or healthcare services.
Other Coverage You Should Consider
Beyond the big three, there are a few other policies worth considering. Hired and non-owned auto insurance covers your employees when they're driving their personal vehicles for work purposes—critical since most home healthcare workers travel between client homes. Employee dishonesty coverage (sometimes called crime insurance) protects you if an employee steals from a client, which unfortunately does happen in this industry.
If you own or lease vehicles for your business, you'll need commercial auto insurance as well. And as your agency grows, you might want to consider cyber liability insurance to protect client health information and business owner's policies (BOP) that bundle several coverages together at a discount.
How to Get Started
First, get your HCSSA license application started through the TULIP portal. While that's processing, start shopping for insurance. Work with a broker who specializes in healthcare businesses—they'll understand the specific exposures you face and can often get you better rates than going directly to insurers.
Get quotes for workers' comp, general liability, and professional liability as a package—many insurers offer discounts when you bundle. Make sure your coverage limits meet the requirements you'll see in typical client contracts (that $1M/$2M for GL and $1M/$3M for professional liability). And don't just buy insurance and forget about it. Review your policies annually as your business grows and your exposures change.
Running a home healthcare agency in Texas means accepting responsibility for vulnerable clients and the people who care for them. The right insurance isn't just about meeting requirements or checking boxes—it's about making sure one mistake or accident doesn't undo everything you've built. Get covered, get licensed, and focus on providing excellent care.
