Don’t Go It Alone in the Lone Star State
Texas is currently the only state that does not require businesses to carry workers’ compensation insurance. Workers’ compensation is a safety net that protects your business and helps injured employees get the medical care they need. If a business opts out of this coverage, it can be vulnerable to a personal injury lawsuit if an employee sustains a workplace injury or illness. Although foregoing coverage is an option in Texas, most business owners understand the importance and the advantages of carrying workers’ compensation insurance. In fact, only five percent of private-sector Texas businesses choose to opt out. Here are three common questions Texas business owners may have regarding workers’ compensation coverage.
Why should I buy workers’ compensation insurance?
More than just a cost of doing business, workers’ compensation insurance is a valuable investment that can save you time, money and heartache should a workplace incident occur. Workers’ compensation insurance provides employees with help if they are injured or get sick while on the job. It provides wage-replacement & medical benefits following a workplace injury or illness. Except in cases of gross negligence, having the proper coverage can also help limit your liability if an employee brings a lawsuit against your business.
Where do I get workers’ compensation insurance for my business?
The Texas Department of Insurance authorizes many private insurance companies, like EMPLOYERS, to provide workers’ compensation coverage. Some employers can also opt to be certified by the Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC), to self-insure.
If you choose to work with a private carrier, it is important to select a reputable company with expertise in your industry. Your carrier and insurance agent can help provide a policy that is based on your payroll and your staff’s job functions. They are also excellent resources for additional information on fraud prevention, workplace safety and loss control, which can also help protect your business.
Am I legally obligated to inform my employees about the status of my workers’ compensation coverage for them?
The short answer is yes.
If you choose to opt-out of workers’ compensation insurance in Texas, you must alert workers that they do not have access to these benefits. The TDI requires employers to post “Document 5: Notice to Employees Concerning Workers’ Compensation in Texas. This document provides information and a hotline for workers to report unsafe working conditions as well as injuries or illness. The state also requires you to file a form with the TDI if you opt-out or terminate coverage.
If you do provide workers’ compensation coverage, the TDI requires you to post Document 6: Notice to Employees Concerning Workers’ Compensation in Texas. This document includes your carrier’s contact information, a list of the injured employee assistance benefits available through the state, and a hotline for reporting unsafe working conditions. Business owners owe it to their employees to provide a workplace where they can safely perform their jobs. Having workers’ compensation coverage is a smart investment that protects both employees and business owners.