In the U.S., states have varying laws and regulations when it comes to workers compensation. Most requirements depend on the industry of a business and the amount of employees, and some businesses must purchase workers compensation through the state while others can purchase private workers compensation policies.
Workers compensation insurance in Texas is a little more complicated. In Texas, this insurance is optional for most employers. One exclusion is construction companies contracted by governmental entities, which must be covered under workers compensation. Texas has both a state fund and individual insurers that provide this insurance.
Since workers compensation isn’t required, however, this leaves businesses open to lawsuits concerning work-related injuries. If an employee is injured on the job and their employer refuses to provide compensation for the injury or time out of work due to the injury, the employee is within their rights to file a lawsuit against the company. Workers compensation limits the amount of compensation provided to the employee by setting a legal standard of compensation that doesn’t involve a lawsuit.
In Texas alone, there are around 200,000 workers compensation claims per year. So even though this insurance isn’t legally required, it is in many business’ best interest to carry it in order to protect employees and the company.
What Does Workers Compensation Insurance Cover?
Workers compensation covers a range of incidents and dangers facing employees and employers. It offers compensation for:
- Immediate medical assistance (ambulances, hospital, surgery, etc.)
- Partial or total disability
- Temporary or permanent disability
- Lost wages
Medical bills are notoriously expensive, and if a business doesn’t carry insurance to cover them, an employee is likely to sue. This is also true in the unfortunate case of employee death. If an employee passes away on the job, their family has a right to sue the company in Texas. In these cases, workers compensation provides death benefits to cover items such as funeral expenses, burial or cremation costs and more.
Disabilities both temporary and permanent are determined by injuries sustained. If an employee is unable to return to work, workers compensation may cover their lost wages while they recover. If an employee qualifies for permanent total disability—in which they are unable to work for the rest of their life—workers compensation may pay compensation to the employee for the rest of the employee’s life.
Without this insurance, it may be difficult for employees to receive the assistance they need. If they win a lawsuit against the employer, the employer may then be in great debt. Workers compensation benefits both parties.
How Much is Workers Compensation in Texas?
Workers compensation in Texas averages at $0.57 per every $100 of payroll. As expected, larger businesses generally pay more for workers compensation insurance than smaller businesses. For example, $0.57 for $9,000 of payroll would be $5,130. The cost of workers compensation depends on payroll, number of employees and the risk of the industry.
High-risk industries or businesses with a long list of previous claims may pay higher workers compensation claims.
When are Workers Compensation Claims Denied?
Workers compensation claims may be denied if the accident occurred due to:
- Employees horse playing or messing around on the job
- Employees were under the influence of drugs or alcohol
- Employees were committing criminal acts
- Intended injury
- Fights between coworkers
- An injury is caused by a pre-existing condition
Most workers compensation policies will have designated healthcare providers for employees to see after an accident. Employees may see another healthcare provider afterwards with their employer’s permission. An underwriter from the employer’s insurance company will then investigate the claim.
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