Protect Your Business With Workers Compensation Insurance inTexas
Workers compensation insurance is optional for most businesses in Texas. Most employers choose to offer Texas workers compensation insurance to their employees because many believe it is a comprehensive and cost-effective choice. But there are exceptions to this rule.
- Companies with building or construction contracts with a government organization.
- Public or educational employers.
- Independent contractors may be required to show proof of work comp if the hiring company’s insurance does not cover them.
Is Workers’ Comp Required in Texas?
Texas is the only state in the United States that does not require workers compensation insurance to the employers. Work compensation insurance covers lost wages and medical expenses for an injured employee while doing their job. Lessen an employer’s liability if an employee files a lawsuit for damages.
Texas employers are not required to carry workers compensation insurance. But those who do not carry this compensation insurance coverage need to report their non-coverage status and report any work-related injuries and occupational illness to the Texas Department of Insurance, Division of Workers Compensation.
Texas employers are also required to inform their employees that they do not offer work comp insurance. In the event they missed the annual reporting, they may receive fines. Employers who do not follow the state workers compensation system are called non-subscribers. The state does not penalize the non-subscribers, but they are at risk for greater liability if a worker gets injured at the job site.
Workers compensation insurance limits employers’ accountability for occupational injuries and other work-related illnesses. Non-subscribers can receive unlimited damages and legal fees if workers bring a personal injury lawsuit against the business.
In 2016, there is an estimate that 78% of employers subscribe to the Texas’ workman’s compensation system. About 23% of non-subscribers choose to offer an alternative option of an occupational benefit plan to its workers.
What Is Workers Compensation Insurance?
Texas workers compensation offers benefits to employees who incur injury or become sick while doing their duties. These benefits cover medical expenses, lost salaries, rehabilitation, and death on the job, death-related costs for the family.
A workers comp insurance policy is purchased by the employers, underwritten by the insurance company, and aims to protect both the workers and the business. Other states have funds available to the public to support workers comp insurance and prevent private insurance agencies from covering workers.
Workers’ compensation policies and premiums vary from company to another insurance company based on their business, the business’ tenor since it became operational, data about past events, previous claims, and more.
Texas Workers’ Compensation Policy Costs
Texas workers compensation coverage premiums depend on payroll costs and the risks of the work the employees perform. Small businesses can expect a minimum premium of $250 per year for a workers compensation policy. Texas’s average cost is from 54 cents for every $100 payroll and is subject to some determinants, including the experience modification rate (EMR).
The EMR is a determinant based on the claim history of a business. Industry standards determine premium rates together with the experience rating of the business. Insurance providers adjust rates depending on their desire to deal with different sorts of business risk. Although it is the same baseline formula for every insurance provider, it must look for the best rate.
The formula to find the business premium base costs is:
Classification code rate x EMR x Payroll per $100 = Premium
This usually equates to a fairly priced policy for business owners. If the premium is higher than the formula gives even though there’s been no workers compensation claims. It would be best if you shopped for an insurance provider that focuses on your industry.
Texas Workers’ Comp Rate Variations
Class Code Low Rate High Rate
8810 Clerical-NOC 7 cents 25 cents
5537 HVAC Installation $1.91 $6.91
8742 Outside Sales 2 cents 43 cents
8017 Retail Store 81 cents $2.93
7600 Drivers & Chauffeurs $1.47 $5.32
Classification systems have standard scales, and a lot of factors impact the pricing of workers compensation coverage. If you are using the formula to get a reasonable quote, make sure to shop for insurers for the best costs. Every insurer has unique compensation schemes that weigh the risk limit for every business industry.
Workers’ Comp Insurance Coverage in Texas
Workers compensation insurance coverage includes the following.
- Some wages from lost work
- Medical costs due to work-related injury or illness
- Legal fees if a worker’s
- Deceased worker’s family with financial benefits
The following are examples of how workers compensation insurance in Texas can protect businesses and their employees.
A Texas employee was injured on the job and resulted in an ER visit. The employee has to take time off from work to recover from the incident. So without workers comp coverage, the workers have to pay for the visit.
An employee was on a trip going to the client but got into an accident and was brought to the hospital. Workers compensation coverage can pay for the hospital fees.
One of the workers slips and falls while performing a job resulting in immediate hospitalization or a doctor’s visit. Workers comp can help cover the employee’s hospitalization costs until they recover.
The workers compensation insurance can help the employers pay for medical fees needed to treat the employees for their job-related injuries and diseases. It can also cover Texas workers’ lost wages while taking their time away from work to recover after the incident.
Coverage requirements. Some employers in Texas are not required to purchase workers compensation insurance. They may obtain it from any insurance company authorized to write workers comp insurance in Texas. One of the necessary costs of successfully running your business is to ensure your workers are protected and on-the-job injuries are minimized.
Proof of coverage. Proof of coverage is vital for any business owner. This proof also shows the type of injury your worker’s comp policy covers. Getting your worker’s comp insurance from a reputable insurance provider will help you provide proof easier.
What Texas Workers’ Compensation Covers
Workers compensation insurance offers benefits to an injured employee and incurred illness on the job. This coverage will benefit workers and protect employers in Texas.
Accident or Injury. If an employee is injured while doing his duty, the workers comp insurance will cover the medical expenses.
Illness. Texas employees can get sick at work, especially when their work lets them get exposed to harmful chemicals or allergens. Worker’s comp will provide help to the ill workers.
Repetitive injury. Not all damages on the job happen in one unique incident. Some injuries can take months or years to develop. Employees can receive treatment and recover with the help of worker’s comp coverage.
Missed wages. Employees who get sick and unable to work will still receive their wages through lost wage benefits.
Ongoing care. Compensation benefits cover ongoing care resulting from a workplace injury or illness. It includes physical therapy that is needed by the employee to recover from his or her injury.
Funeral costs. Workers’ comp coverage can help pay for the funeral costs of an employee who died while on duty.
Disability. Some occupational injuries can be so severe that employees may never be able to work again. Workers’ comp insurance in Texas provides benefits as an aid to workers for their medical expenses. It can also cover the lost wages for disabling workers.
Tips on Getting Workers Compensation Texas
Here are a few tips to make the process of picking Texas workers’ compensation convenient.
Fixed Your Employment Safety Standards
Industries with high-risk nature of work are expected to have a higher number of claims. But small businesses that don’t have safety standards, implement, train, and monitor activity might find it challenging to get workers compensation insurance. Insurance companies have standards in giving insurance to companies who care about safety.
Be a Subscriber to Avoid Expensive Lawsuits
The injured workers cannot file complaints against the employer if they are receiving workers compensation benefits. Civil law only allows them to sue for pain or suffering, whether they are subscribers or non-subscribers. This can increase legal defense costs and potential claims provided to the harmed parties and their beneficiaries.
Contact a Broker to Shop Workers’ Compensation Insurance for You
To obtain the best alternatives for small business insurance, brokers work with different insurance agencies. They take one application from the employer, and they do all the work, such as comparing rates and finding the most suitable for your specific industry.
Is Texas workers compensation mandatory for part-time employees?
Worker compensation in Texas is optional, so it goes the same to part-time workers. Although a worker’s comp is not required, it depends on the employer’s best interest to provide coverage. If an employee gets injured on the job, the employers will be held liable to pay for medical expenses and other related fees, ongoing therapy, and missed wages.
Penalties for not having workers compensation insurance in Texas
There are no penalties for not having worker’s comp insurance for private firms. Usually, it is optional, but it limits an employer’s liability in case an injury happened in the workplace.
An employer is responsible for providing a safe workplace to its workers and taking responsible measures to protect its employees’ health and life. However, if an employer is providing workers compensation coverage but did not comply with its specific requirements, the employer may face administrative penalties.
The Bottom Line
Even though workers compensation insurance is not required in Texas, it is essential protection against potential claims, especially if the business owner cannot pay for the employee’s medical fees.
Every state except Texas has worker’s comp laws that require employers to provide on their workers. However, even if it is not necessary for Texas, most business owners carry a workers compensation policy because of the protection and help it could provide to both the employers and employees. Employers who choose not to have the workers’ comp are required to report injuries or work-related illness to the Texas Department of Insurance. Failing to do so will make them vulnerable to lawsuits and possible fees.
Employers who carry workers compensation insurance in Texas can require their employees to submit to a medical examination. They should report the injury to the employer’s insurance company or for non-subscribers. They should report them to the Texas Department of Insurance within eight days of learning about the injury. Employees have 30 days to report work-related injury or illness to their employers. Employees have one year to file a claim for compensation with the workers compensation division in Texas. Texas worker’s law sets the limits on how much the employees could get in their claims in case they get hurt or sick on the job. Texas employers need to inform their workers and the Division of workers if they no longer provide the coverage.
Learning and understanding Texas workers compensation law is important, especially regarding the business’s safety and employees. It also helps everyone that Texas workers compensation insurance is essential protection for every business. With this, employers would be able to get competitive pricing for the coverage from a reputable insurance company.
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