Here's something that surprises most attorneys opening a practice in Texas: the state doesn't actually require you to carry malpractice insurance. In fact, Texas is famously hands-off when it comes to business insurance mandates. But before you celebrate skipping those premium payments, you need to understand what this really means for your law firm—and why going bare might be the riskiest business decision you ever make.
Texas takes a unique approach to insurance requirements for law firms. While the state won't force you to buy coverage, the practical realities of running a legal practice mean you'll likely need several types of insurance anyway. Let's break down what Texas actually requires, what your clients will demand, and what you need to protect your practice.
Professional Liability Insurance: Not Required, But Essential
Unlike Oregon and Idaho—the only two states that mandate legal malpractice insurance—Texas doesn't require attorneys to carry professional liability coverage. The State Bar of Texas won't check whether you're insured, and you're not required to disclose your insurance status to clients.
But here's the catch: if your firm is structured as a Limited Liability Partnership (LLP), Texas law requires you to either carry $100,000 in professional liability insurance or set aside that amount to cover potential judgments. This is the one hard requirement you'll face.
For everyone else, the reality is that going without malpractice insurance closes more doors than it opens. Institutional clients—banks, corporations, insurance companies—almost always require proof of coverage before they'll hire you. Referral services won't list you. Opposing counsel might question your credibility. Most Texas attorneys carry coverage ranging from $100,000 per claim and $300,000 aggregate on the low end, up to $1,000,000 per claim and $1,000,000 aggregate for larger firms or high-risk practice areas.
Workers' Compensation: Texas's Unique Non-Subscriber System
Texas stands alone as the only state where workers' compensation insurance is optional for private employers. If you run a law firm with employees—paralegals, legal assistants, office staff—you can choose to "subscribe" to the workers' comp system or operate as a "non-subscriber."
If you go the non-subscriber route, you must file an annual notice with the Texas Department of Insurance, post visible notices in your office stating you don't carry coverage, and provide written statements to every new hire. This transparency requirement ensures employees know they're not covered under workers' comp if they get injured on the job.
There's one major exception: if your law firm contracts with any government entity—federal, state, or local—you must provide workers' compensation coverage for each employee working on that government project. No exceptions, no opt-outs.
Why do many Texas law firms still buy workers' comp even though they're not required to? Simple: non-subscribers lose important legal protections. If an employee gets hurt, they can sue you in civil court for negligence. With workers' comp, you're generally protected from these lawsuits. For most firms, the premium is cheaper than the risk.
General Liability Insurance: The Coverage Your Landlord Demands
General liability insurance covers third-party bodily injury and property damage that happens at your office. Think slip-and-fall accidents in your reception area, a client tripping over your office equipment, or damage to a neighboring suite from a water leak in your space.
Texas doesn't mandate general liability insurance for law firms. However, your commercial lease almost certainly does. Most landlords in Texas require tenants to carry general liability coverage with minimum limits between $300,000 and $2,000,000 per occurrence. Check your lease agreement—buried in the insurance provisions, you'll find specific requirements you agreed to meet.
General liability is relatively inexpensive for law firms because your business operations are low-risk compared to, say, a construction company. Many firms bundle it with professional liability coverage for a discount.
What About Other Coverage Types?
Beyond the core policies, Texas law firms often need additional coverage. Commercial property insurance protects your office equipment, furniture, and technology from fire, theft, or weather damage. Cyber liability insurance has become essential as data breaches affect law firms with increasing frequency—client information is valuable to hackers.
If you have company vehicles for serving documents or meeting clients, Texas requires the same auto liability insurance as other drivers: minimum limits of $30,000 per injured person, $60,000 per accident for bodily injury, and $25,000 for property damage. But for business use, you'll want commercial auto coverage with much higher limits.
How to Get the Right Coverage for Your Texas Law Firm
Start by reviewing your current obligations. Pull out your office lease, client contracts, and LLP formation documents to identify any insurance requirements you've already agreed to meet. If you contract with government entities, workers' comp isn't optional.
Next, assess your risk exposure. Solo practitioners handling low-risk transactional work face different liability risks than litigation firms or practices in high-exposure areas like medical malpractice defense. Your coverage needs should match your actual exposure.
The Texas Lawyers' Insurance Exchange (TLIE), created by the State Bar of Texas, offers professional liability coverage specifically designed for Texas attorneys. They understand the state's legal market and offer policies tailored to different practice areas and firm sizes. Shopping around and comparing quotes from multiple carriers will help you find the best coverage at the right price.
Yes, Texas gives law firms more freedom to operate without insurance than almost any other state. But that freedom comes with responsibility. One malpractice claim, one employee injury lawsuit, or one liability incident could close your practice if you're uninsured. Smart Texas attorneys treat insurance not as a legal requirement but as a business necessity—because protecting your practice means protecting your livelihood.
