Workers' Compensation Insurance in Texas

Texas doesn't require private business owners to carry workers' compensation insurance. However, carrying a compensation policy ensures financial protection for you and a weekly wage for employees with work-related injuries.

Who Needs Workers' Compensation Insurance in Texas?

Texas doesn't require most private employers to purchase workers' compensation insurance, but some exceptions exist. For example, private companies that contract with federal, state, and local governments must carry workers' compensation insurance to cover medical treatment for workplace injuries. Also, state and local government entities must carry a compensation policy.

Texas Workers' Compensation Requirements

According to Texas workers' compensation laws, private business owners don't have to carry compensation insurance coverage. By contrast, state and local government employers must carry this insurance for work-related injuries. Likewise, some business types require workers' compensation insurance, regardless of state law. In some cases, employers have contractual obligations with clients that require a workers' compensation policy.

Texas calls employers who don't pay workers' compensation insurance costs "non-subscribers." These employers must report their status to the Texas Department of Insurance and let employees know they don't have a workers' compensation policy. The downside of not carrying Texas workers' compensation is companies lose certain legal defenses when employees sue non-subscribers for medical treatment due to workplace injuries.

How Does Workers' Compensation Work in Texas?

One of the few states that doesn't make workers' compensation insurance mandatory for private employers, Texas has a unique way of handling this coverage. Employers considered non-subscribers take on more legal risks because employees with work-related injuries may sue them via common law defenses that help them win their cases.

Subscribers offer employees numerous benefits with Texas workers' compensation, including medical treatment and rehabilitation costs related to workplace injuries. Additionally, these policies typically provide income benefits, such as:

• Temporary income benefits cover weekly wages when employees can't work due to workplace injuries.
• Impairment income benefits cover permanent impairments stemming from work-related injuries.
• Supplemental income benefits cover employees with a 15% or more impairment rating who haven't returned to work or earn less than 80% of their weekly pre-injury wage.
• Lifetime income benefits cover catastrophic injuries, such as body part loss and permanent disabilities.
• Death benefits provide employees' dependents with a portion of lost wages and funeral expenses for work-related injuries and illnesses resulting in death.
• Burial benefits cover burial expenses when employees die as a result of workplace injuries or illnesses.

The process starts with workers reporting a workplace injury or illness within 30 days of occurrence or diagnosis. They file a claim with their workers' compensation insurance carrier and resolve any disputes that arise. The Texas Department of Insurance's Division of Workers' Compensation handles these disputes with benefits review conferences, case hearings, and appeals.

Why Is Workers' Compensation Insurance Important?

Texas workers' compensation is important for a multitude of reasons, including limiting liability for employers and complying with industry regulations or contractual obligations with clients. Workers' compensation insurance also helps manage financial impacts by covering costs related to workplace injuries and illnesses with predictable premiums that limit expenses. Lastly, workers who know they're covered may have better morale, potentially improving productivity and retention.

How Much Does Workers' Compensation Insurance Cost?

The cost of Texas workers' compensation insurance varies due to the industry, how many employees companies cover and the company's claim history. Specific risks associated with some job roles may drive premiums higher, but putting safety programs into play may lower both incidence rates and insurance premiums.

Also, the carrier business owners may influence costs. Some insurance carriers may offer special rates and discounts based on industry and the type of business, so it helps to shop around before committing to a compensation policy.

Get a Free Quote for Workers' Compensation Insurance in Texas

Choosing a high-quality Texas workers' compensation insurance policy helps protect your business and workers from workplace injuries and illnesses. Though the state doesn't require carrying this insurance, common law protections for employees of non-subscribers may reduce legal protections against lawsuits that employees file for work-related injuries.

When you need a free quote for a Texas workers' compensation policy, reach out to Tivly. We partner with highly rated companies to match you with the right commercial insurance policy for your business' needs. Discover how we can help you with a top-notch workers' compensation policy that provides financial protection for business owners and peace of mind for employees.

Reviewed By: Sarah Reid, Licensed Agent