Workers Compensation Insurance
Workers Compensation is not mandatory in Texas. Recent tort reforms changes by the Texas Legislature have resulted in improvements in the state’s program for workers compensation and improvement in the overall Texas business climate.
The Texas Department of Insurance’s Division of Workers’ Compensation (DWC) regulates the state’s workers’ compensation system and certifies employers that want to self-insure.
Texas doesn’t require most private employers to have workers’ compensation insurance. Private employers who contract with the government are required to provide workers’ compensation coverage for each employee working on the public project. Some clients may also require their contractors to have workers’ compensation insurance.
Employers who choose not to have workers’ compensation insurance must
- File an annual notice with TDI.
- Display notices of non-coverage in the personnel office and throughout the workplace.
- Give a written statement of non-coverage to each new employee.
Employers with workers’ compensation have some important legal protections, including immunity from most lawsuits by injured workers. If an employer has workers’ compensation insurance, a lawsuit may go to court after it’s been through TDI’s administrative dispute process. The court will consider TDI’s recommendations, and only issues in dispute may be used as evidence. Resolved issues can’t be reintroduced. The employer’s insurance company pays attorneys’ fees and other defense costs.
Employers without workers’ compensation could have to pay punitive damages if they lose lawsuits. They also lose certain common-law defenses, such as arguing that:
- The injured worker’s negligence caused the injury.
- The negligence of fellow employees caused the injury.
- The injured worker knew about the danger and voluntarily accepted it.