Why Do Businesses in Texas Need Workers’ Compensation?
Workers' compensation insurance is optional in Texas. Employers who purchase this coverage find it a cost-effective option that can protect their companies from catastrophic loss if a work-related injury occurs. It's important to learn as much about workers' comp insurance as possible to make an informed choice.
What Happens If You Don’t Buy Workers' Comp Insurance in Texas?
Every employee needs some type of protection from claims brought by injured or ill workers. If an employer chooses not to invest in workers' compensation insurance, they must report this to the state and notify their employees. A business owner who does not purchase workers' comp insurance is referred to as a “nonsubscriber.” Employees who are injured on the job have the right to file a lawsuit against their employer in the absence of workers’ comp coverage.
Importance of Workers' Comp for Sole Proprietors
Even though employers aren't required to carry workers' comp in Texas, many self-employed individuals buy this policy for themselves. In some cases, the companies that hire them may require that they have a workers' comp policy in place to protect everyone involved. Workers' comp is essential if you have a high-risk job. If your health insurance denies your claim for a work-related injury, workers' comp can cover the medical expenses. Also, while you recover, the insurance ensures that you receive an income in the form of partial lost wages.
Texas Employers Who Must Have Workers’ Comp
Several employers and industries in Texas are required to carry workers' compensation insurance, including:
- State Universities
- Public employers
- Motorbus companies and motor carriers
- Companies that work with government entities
Rules and Benefits of Workers' Compensation Work in Texas
The Division of Workers’ Compensation regulates the workers’ compensation system in Texas. The employer pays $0.52 for every $100 in covered payroll. The type of industry, the number of employees, coverage, location, and payroll determine how much workers' comp insurance must be purchased. Once the amount of insurance required is determined, the policy is purchased, and the employees will begin to receive the benefits immediately.
The three types of workers’ comp benefits for employees in Texas are:
- Medical benefits
- Lost wages benefits
- Burial and death benefits
The employer’s liability insurance covers legal expenses if the employee sues them, but if the employee accepts the benefits, they cannot sue their employer under the exclusive remedy provision.
Workers' Compensation Burial and Death Benefit Details
In addition to medical and income benefits, workers' compensation in Texas also offers burial and death benefits. If the employee dies due to a work-related injury, their survivors receive the death benefit. Burial expenses up to $10,000 are also covered.
Texas Workers' Compensation Law for Settlements
Once the condition of the injured worker stabilizes, and they reach maximum medical improvement (MMI), Texas law allows the case to be settled between the injured worker and the insurer. The agreed settlement must be approved by the Texas Department of Insurance. No lump sum payments are allowed, except for cases involving impairment income benefits.
Workers' Compensation Statute of Limitations Applicable in Texas
For an employee to be eligible for workers' compensation benefits, they must file their claim within one year of the date of injury. Whether a claim is filed or not, an employee must notify their employer within 30 days of receiving the injury so they can attempt to resolve any problems that may arise.
Workers' comp insurance is an important coverage with several benefits for both the employer and the employee. If you have more questions about this coverage, contact our team at Amity Insurance Group.