Is My Texas Business Required to Carry Workers' Compensation Insurance?
Workers' compensation benefits are generally paid to workers who were hurt on the job or contracted an occupational illness, regardless who's to blame for the accident which caused the injuries. Though there are some exceptions when employees are hurt during activities outside the scope of their job duties, employees are entitled to benefits in most cases.
The question for employers is who pays the costs of employees' medical treatment and benefits in lieu of lost wages. Some states require businesses to carry workers' compensation insurance for this purpose. Businesses purchase coverage for their employees, and in the event of a payable claim, the insurance company pays benefits to the injured employee.
Large businesses are well-acquainted with workers' compensation insurance premiums and some of the largest businesses are self-insured.
In Texas, businesses decide whether to carry workers' comp insurance
Texas doesn't require most private employers to have workers' compensation insurance, but businesses which contract with the government are required to provide workers' compensation coverage for every employee who works on the public project. Other types of clients can also require contractors to carry workers' compensation insurance as one of the terms in their contracts.
If you choose not to carry workers' compensation insurance in Texas, you must comply with Texas Department of Insurance (TDI) requirements by:
- Filing an annual notice with TDI
- Displaying notices of noncoverage in the personnel office and throughout the workplace
- Giving a written statement of noncoverage to each new employee
There are a number of advantages to carrying workers' compensation insurance, including immunity from most lawsuits by injured workers. Workers must go through TDI's administrative dispute process before they can take the unresolved issues to court. Employers without insurance may be exposed to punitive damage awards if they lose in court.
If you have questions about whether your business should carry workers' compensation insurance, or need help defending against a claim, contact one of our experienced Brazos County, Texas commercial law attorneys. Call the Peterson Law Group to make an appointment at 979-703-7014, and sign up to receive our free online newsletter.