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Workers' Compensation in Texas | Pie Insurance

Unlike most states, Texas doesn’t require businesses to carry workers’ comp insurance. However, as a small business owner, choosing not to provide coverage can be costly. Here are 10 important facts to know about workers’ comp in Texas.
Workers' Compensation in Texas | Pie Insurance

Texas workers’ comp 101

Does your small business need workers’ compensation insurance?

Texas is one of the few states where private small business owners can choose whether or not to provide workers’ comp insurance for employees. Even though many organizations choose to carry the coverage, a good portion of companies opt-out altogether and are called “non-subscribers.”

As a small business owner, you’ll need to decide whether you want to offer workers’ comp or not. If you choose to forgo the coverage, it’s essential that you understand the responsibilities you have as the employer if one of your team members suffers a workplace injury.

For instance, instead of an injured worker filing a workers’ compensation claim, they can sue your organization instead. On top of that, if your Texas small business is a non-subscriber, then you can’t argue that the employee’s injury was a result of any of the following in court:

  • The employee’s negligence
  • Another employee’s negligence
  • The accepted and known danger of performing the job

It’s easy to see why having workers’ comp insurance can benefit your company. If you’re considering coverage for your small business, the following list will provide you with important information before purchasing your workers’ compensation insurance policy.

10 important workers’ compensation insurance facts for Texas small business owners

  1. While having workers’ compensation insurance is recommended, the state of Texas doesn’t require private businesses to carry the coverage.
  2. Workers’ comp will help mitigate the financial responsibility a company has when paying the costs associated with an injured employee.
  3. Small business owners who opt not to carry workers’ comp may face personal injury lawsuits from employees who suffer from a workplace injury or illness.
  4. If you decide to discontinue your workers’ comp insurance, you must notify both your employees and the Workers’ Compensation Division of the Texas Department of Insurance immediately.
  5. Texas companies that don’t offer workers’ compensation must inform employees of their hire date and provide a Notice 5 explaining that the organization doesn’t provide coverage.
  6. Texas workers’ comp insurance offers injured employees three main benefits: medical benefits, income benefits, and death benefits.
  7. The state of Texas places a significant emphasis on helping injured employees return to work by offering a Return to Work program that allows employees and employers to move forward after the workplace injury.
  8. Employers have eight days to complete a First Report Form and report a workplace injury or illness with the Texas Department of Insurance.
  9. Public employers such as state agencies, cities, and counties must have workers’ compensation insurance.
  10. Small business owners who operate a sole proprietorship can purchase workers’ comp insurance for themselves to cover medical bills associated with a workplace injury.

Remember, every situation is different and state workers’ compensation laws are subject to change, so be sure to do your research and speak with a trusted advisor.

Thanks for reading! Please note that this content is intended for educational purposes only. As laws change regularly, you should refer to your state legislation and/or an advisor for specific legal counsel. If you’re a small business owner, learn more about workers’ compensation insurance or check your current rate in 3 minutes.