If you run a business and have employees, you’ll need to purchase Texas workers’ compensation insurance. In fact, this type of insurance is a requirement in most states, including Texas, with some exceptions. It helps pay your employees’ medical bills if they sustain an injury on the job. And limits your liability for workplace accidents, is a requirement in most states, including Texas, with some exceptions.
In Texas, business owners can expect to pay, on average, $0.54 for every $100 of covered payroll. That means, for example, a business with a total annual payroll of $100,000 will pay approximately $540 per year for workers’ compensation insurance, or around $45 a month. This is only a rough estimate, since factors such as your location, the different rates for staffing types (laborers vs office workers), and your claims history can all have a significant impact on your rates.
One of the biggest factors in determining your rates for workers’ compensation insurance is your employees’ risk, or the likelihood of a workplace injury occurring at your business. To assist insurers in determining risk exposure, and to get the best rates for your business, you can use a variety of workers’ compensation class codes. This is important because it costs more to insure certain employees. For example, office employees may have lower workers’ compensation costs than those who work outside of your office and face more risks.
If one of your employees is injured at work or becomes ill because of workplace conditions. Workers’ compensation in Texas can help pay for their medical bills. The weekly average wage of an employee is used to calculate workers’ compensation benefits. The type of claim determines the exact amount.
The most important thing that workers’ compensation does is offer coverage for your injured employee’s medical treatment. This would include doctor’s appointments, hospital stays, and surgical procedures. Following a return to work, an employee may need ongoing care. Such as follow-up appointments or extra surgeries; workers’ compensation will also cover these medical bills.
Additionally, if the incident causes permanent or temporary disability, the employee will receive compensation in the form of weekly or lump sum payments. If your employee suffers a temporary disability, their injury is preventing them from performing their regular job while they recover. They have a permanent disability if a doctor determines that they will not fully recover from their injury.
These two classifications fall into two subcategories:
- Temporary total disability (TTD) – These payments will be made if your employee is unable to work at all during their recovery.
- Temporary partial disability (TPD) – TPD payments will be made if your employee is still able to work, but with certain restrictions, such as requiring lighter duties or fewer hours. Even if your company does not provide work that meets these requirements, the employee may still be eligible for these payments.
- Permanent total disability (PTD) – If the accident or illness leaves your employee unable to work at all, even after recovery, they will be eligible for PTD payments.
- Permanent partial disability (PPD) – If an employee has permanent impairments but is able to work with those impairments, they will be eligible for PPD.
Texas’s Workers’ Compensation Death Benefits
If an employee covered by Texas workers’ compensation insurance dies as a result of a work-related injury or illness, the employee’s survivors will be entitled to death benefits. Benefits may be available to the following family members:
- Children under the age of 18, or under the age of 25 who are full-time students
- Children of any age who were financially dependent on the worker at the time of his or her death
- Grandchildren who were at least 20% dependent on the employee (if the child’s parent is not eligible for death benefits)
If none of the above apply, other family members who relied on the worker for financial support can receive death benefits.
Death benefit will generally be 75% of the deceased worker’s average weekly wage, up to a state-determined amount each year. The money will be divided among the deceased employee’s beneficiaries.
Workers’ compensation also covers burial expenses up to $10,000.
Texas’s Workers’ Compensation Laws
Texas differs from most other states in that it does not generally require businesses to carry workers’ compensation insurance, though employers who do not have this coverage must notify the state and their employees that they do not have it.
With that being said, there are a few types of businesses that are required to carry workers’ compensation, as well as types of employees that need to be covered. Texas coverage requirements include the following:
- Any government employer, including municipalities, counties, and state agencies
- Businesses that work with government agencies
- State universities
- Public sector building and construction contractors
- Bus companies
- Transportation companies (providing transportation over public highways)
- Dealers in liquid propane gas and compressed natural gas
- Employers of inmates participating in work furlough programs
Despite the fact that it is not required by law, sole proprietors, independent contractors, and other self-employed individuals may want to purchase workers’ compensation insurance to financially protect themselves. Their clients may also require them to have this insurance.
Purchasing workers’ compensation is a wise financial decision, especially if you work in a dangerous industry or do physical labor. Your health insurance company may not fully cover a work-related injury, leaving you liable for costly medical bills. In addition, health insurance never covers lost wages, which workers’ comp often does.
How to Buy Workers’ Compensation Insurance
In Texas, you can buy a workers’ compensation insurance policy from a private insurance carrier that is licensed by the state to offer workers’ compensation insurance.
If you meet certain criteria, you may also be able to self-insure your workers’ compensation claims. This means you will pay any workers’ compensation claims out-of-pocket as they arise, instead of paying a premium and submitting claims to an insurance company.
If you need help finding a policy, Ez’s agents can help sort through all of your options, and find you the best workers’ comp insurance for your business.
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How to Get the Most Savings
Despite the fact that the majority of workers’ compensation costs are determined by factors that are out of your control, there are still ways to save. A safety program is an excellent way to avoid workplace injuries and claims. It is absolutely vital to have safety and proper working procedures in place, no matter your industry. Employees who have been safety trained are less likely to be injured, resulting in lower workers’ compensation costs for your business.
It is also advisable to regularly review your claims history. Examining your claims history can help you identify and correct patterns. Certain aspects of your operations may become a frequent source of claims, and so might need to be adjusted. By maintaining a close watch on potentially hazardous operations, you can save money on claims and on workers’ comp insurance.
One of the most efficient ways to save money is to properly classify your employees. When you apply for workers’ comp insurance, you will have to classify each employee based on their function, such as desk worker or laborer. These risk classifications have an impact on the cost of workers’ compensation, so make sure your employees are classified correctly. Not only that, but if you fail to properly classify your employees, you could be fined.
And finally, working with one of EZ’s licensed agents can save you hundreds of dollars per year. We specialize in insurance for a wide variety of small businesses and can find you the best policy for your business and your budget. Start a free online application today to start comparing workers’ compensation insurance quotes for your small business from leading U.S. carriers.
Texas Workers’ Compensation FAQs
Are you required to have workers’ compensation insurance in Texas?
No, Texas is one of the few states that does not require workers’ compensation insurance. But if you don’t have coverage, and an employee gets hurt on the job, they can bring a lawsuit against you, and you may end up paying hefty legal and medical bills.
How do workers’ compensation settlements work in Texas?
In Texas, a workers’ compensation settlement means that the injured worker and your insurer have reached an agreement on the resolution of a claim. When a doctor determines that the worker’s condition has stabilized, the worker is said to have reached maximum medical improvement (MMI), and the case can be settled.
With the exception of cases of disability income benefits, the Texas workers’ compensation system does not allow lump-sum settlements.
Every workers’ compensation settlement in Texas must be approved by the Texas Department of Insurance.
What is the statute of limitations in Texas?
To be eligible for benefits, employees in Texas must file a workers’ compensation claim within one year of the date of injury.
In addition, it is the employee’s responsibility to notify you, the employer, within 30 days of the injury so that you can resolve the problem or take any necessary steps to remedy the situation.
Why Use EZ
We do everything in our power to make shopping for workers’ compensation insurance as easy and stress-free as possible. And we give each of our customers our undivided attention. As soon as you fill out our form, you will receive instant, free quotes from your dedicated agent. Who will give you personalized service and will work to understand your needs. We want to ensure that you get the best coverage at the best price. Our services are completely free so check out your quotes today!
If you still have questions, feel free to give us a call at 877-670-3538. You will speak to a local insurance agent who can answer all of your questions. And help you find the workers’ compensation policy that works best for your business.