Texas Approves 11.5% Cut to Workers’ Compensation Rates: A Win for Businesses
The Texas Department of Insurance (TDI) recently approved an 11.5% reduction in workers’ compensation advisory loss costs. This change becomes effective on July 1, 2025. For Texas businesses, this move means real financial relief.
What This Rate Reduction Means
The new rate reduction will lower the base cost insurers use to calculate premiums. Texas uses “loss costs” to reflect the expected cost of claims. By cutting this rate, the state helps reduce premiums for businesses that provide workers’ compensation coverage.
This is not a small change. Businesses across industries will feel the impact. Construction companies, manufacturers, and logistics firms can all expect lower insurance expenses.
Why Texas Made This Move
Texas has seen improvements in workplace safety and a decline in claims. Fewer injuries mean lower costs for insurance carriers. TDI recognized this and approved the rate cut based on data from the National Council on Compensation Insurance (NCCI).
In its bulletin, TDI confirmed that insurers must submit their updated filings by June 1, 2025. This ensures that the savings will reach businesses promptly (TDI Bulletin B-0002-25).
A Boost for Business Owners
This rate drop gives employers a chance to reallocate funds. Instead of spending on high premiums, they can invest in growth. Lower workers’ comp costs can also help small businesses stay competitive.
In addition, the cut may encourage more companies to secure proper coverage. When insurance becomes affordable, compliance increases. That leads to safer workplaces and more protected employees.
Why This is a Positive Trend
Texas has seen a steady improvement in workers’ comp affordability. Since 2003, the state has focused on reforms that work. This 11.5% drop continues that trend and shows strong market health.