Workers’ Compensation is a state-regulated insurance program that helps people with work-related injuries and illnesses. Under this coverage, eligible employees receive compensation and medical care to treat their injuries and illnesses. Depending on the severity of the injury itself, workers’ compensation might also provide:
- Payments to replace some of an injured employee’s lost income, up to limits set by the law
- Compensation for burial expenses for employees that perish on the job
- Death benefits for dependents of employees killed on the job
Workers’ compensation is an important insurance to have to protect your company and your employees. While a helpful tool, there are limitations to the coverage itself, as noted below.
Workers compensation does not pay for injuries that:
- Are intentional or self-inflicted
- Result from horseplay or voluntary drug or alcohol intoxication
- Are inflicted by someone for personal relations unrelated to the job
- Result from voluntary participation in off-duty recreational, social, or sports events; or
- Results from “acts of God” (i.e. floods, hurricanes, tornadoes), unless the job has a high risk of such injury
Workers’ Compensation is regulated by the Texas Department of Insurance’s Division of Workers’ Compensation (DWC). In the state of Texas, it is not required that employers purchase this coverage. However, private employers who contract with governmental entities must provide workers’ compensation for coverage for the employees working on the project.
As a business owner, if you choose not to have workers’ compensation, you are then considered a “nonsubscriber.” A nonsubscriber must:
- File an annual notice with DWC
- Post notices in their personnel offices and workplaces; and
- Tell new employees in writing that they don’t have workers’ compensation
While helpful, it is important to weigh the risks associated with not having workers’ compensation. If you’re on the fence, or would like more information about this specialty insurance, please reach out to a Ramey King Commercial Lines agent today!