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Workers Compensation Insurance
Workers’ compensation insurance is a state regulated insurance system that ensures medical bills and some lost wages are paid for employees injured on the job or who have work-related diseases or illnesses.
Employees covered by workers’ compensation receive benefits based on the type and severity of their injuries. Benefits include:
- medical benefits for medically necessary treatment of work-related injuries and illnesses;
- income benefits for a specified period of time up to a certain dollar limit set by law; and
- compensation for burial expenses for employees killed on the job;
- death benefits for dependents of employees killed on the job.
If there is a workers’ compensation claim for benefits, an employee’s family may be entitled to pursue other remedies through the courts if the employee is killed and the death was caused by the employer’s gross negligence or intentional act or omission.
Workers’ compensation doesn’t pay for injuries that:
- are intentional or self-inflicted,
- result from horseplay or voluntary drug or alcohol intoxication,
- are inflicted by someone else for personal reasons unrelated to the job,
- result from voluntary participation in off-duty recreational, social, or sports events, or
- result from “acts of God” (like floods or hurricanes), unless the job has a particularly high risk of such injuries.
The Texas Department of Insurance- Division of Workers’ Compensation (TDI-DWC) regulates the state’s workers’ compensation system by:
- administering the workers’ compensation law to ensure that medical and indemnity benefits are paid to injured workers according to the workers’ compensation law,
- providing a mechanism for dispute resolution of workers’ compensation claims,
- coordinating return-to-work efforts between insurance company and policyholder,
- providing workplace safety services, and
- issuing certificates of authority to self-insure for workers’ compensation to employers that qualify.
Texas doesn’t require most private employers to carry workers’ compensation insurance. However, private employers who contract with governmental entities are required to provide workers’ compensation coverage for each employee working on the public project. Some contractors may require their sub-contractors and independent contractors to carry workers’ compensation insurance.
Employers may not charge employees for workers’ compensation coverage. There are some exceptions for independent contractors and certain building and construction workers.
Providing Workers’ Compensation
If employers choose to provide workers' compensation, they must do so in one of the following ways:
- buy a workers’ compensation insurance policy from an insurance company licensed by TDI,
- be certified by TDI-DWC to self-insure workers’ compensation claims,
- join a self-insurance group that has received a certificate of approval from TDI, or
- be a self-insured governmental entity.
Political subdivisions may self-insure, buy coverage from insurance companies, or enter into inter-local agreements with other political subdivisions that self-insure. Emergency service organizations and political subdivisions may cover volunteers – such as volunteer firefighters, police officers, and emergency medical personnel – with a special endorsement on the policy.
Employers with workers’ compensation have some important legal protections, including immunity from most lawsuits by injured employees. If an employer has workers’ compensation insurance, a lawsuit may only go to court after it has been through TDI-DWC’s administrative dispute process. The court will consider TDI-DWC’s recommendations, and only issues in dispute may be used as evidence. The employer’s workers’ compensation insurance company pays attorneys’ fees and other defense costs.
Most insurance companies won’t sell a policy unless the employer has at least one part-time employee or expects to have an uninsured contractor work for them while the policy is in effect. Some insurance companies may write a policy to cover executive officers of a corporation that has no other employees.