Employers often buy workers’ compensation insurance to pay medical and income benefits to workers who have work-related injuries or illnesses. This type of insurance protects workers by assuring that they are compensated for their injuries, but it also is beneficial to employers. In addition to relieving them of liability for claims, workers’ compensation gives employers certain legal protections, including immunity from most employee injury lawsuits.
Workers receive benefits based on the type and severity of their injuries. Benefits can include:
- lifetime medical benefits for necessary treatment of compensable injuries and illnesses
- disability income benefits for a specified period of time and up to dollar limits set by law
- limited funeral expenses for workers killed on the job
- death benefits for surviving dependents of workers killed on the job.
The Texas Department of Insurance (TDI) regulates the state’s workers’ compensation system.
Texas does not require most private employers to carry workers’ compensation insurance. Private employers who contract with governmental entities 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 of no coverage with TDI
- prominently 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, a lawsuit may go to court only after TDI’s administrative dispute process has been exhausted. TDI’s recommendations must be presented to the court, and evidence is limited to the issues in dispute Resolved issues cannot be reintroduced. The employer’s insurance company pays attorneys’ fees and other defense costs.
Employers without workers’ compensation could be forced to pay punitive damages if they lose injury 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 of the danger and voluntarily accepted it.