Workers’ compensation has two parts. Part one is workers’ compensation insurance which pays for injuries and illnesses of employees while the employees are working under the scope of employment. Part two is the employer’s liability section. Employer’s liability protects the employer from a lawsuit from an employee. Both parts are subject to exclusions and limitations.
Texas is one of the few states that does not require an employer to have workers’ compensation, but our state laws certainly encourage the employer to have workers comp. If you do not have a workers’ compensation policy and you are sued by an employee, you lose your common law defenses. This basically means your defense is severely restricted. If you choose to opt out of work comp you must also notify the state and all of your employees that you do not have work comp.
Workers’ Compensation is one of the most difficult classes of insurance to fully comprehend and properly rate. As a result, we have a special power point on workers compensation called “You Can Cut Your Workers’ Compensation Costs”. You should find the video informative and enlightening. Please watch the power point and if you should have any additional questions, contact at your earliest convenience.