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Texas is unique among U.S. states because workers' compensation coverage is optional for most private employers. Which Labor Code section establishes this non-subscriber rule, and what is the PRIMARY consequence for a non-subscribing employer that injures an employee?

Labor Code §406.002 makes WC elective; a non-subscriber loses the exclusive remedy defense and common-law defenses (contributory negligence, fellow servant, assumption of risk)
BLabor Code §408.001 makes WC mandatory; a non-subscriber is automatically enrolled in TPCIGA coverage
CLabor Code §406.002 makes WC elective; a non-subscriber retains all common-law defenses but must pay a penalty to the Division
DLabor Code §406.033 makes WC optional; a non-subscriber is immune from employee tort suits

Why this is the answer

Texas Labor Code §406.002 establishes that workers' compensation insurance is elective for most private employers — making Texas the only state with this rule. A non-subscribing employer that injures an employee faces a negligence lawsuit with none of the traditional common-law defenses available to employers (contributory negligence, fellow servant rule, assumption of risk) — these are stripped by §406.033. §408.001 establishes the exclusive remedy for subscribing employers, not non-subscribers. There is no TPCIGA safety net for WC non-subscribers; TPCIGA covers admitted P&C insolvencies, not WC liability for non-subscribers.

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