How Texas Companies Benefit from Workers’ Compensation Insurance
Quick look: Texas is the only state where workers’ compensation insurance isn’t mandatory for most private sector employers. Despite this fact, more businesses are using this insurance to manage complex claims and strengthen their workforce safety programs. In this blog, discover what protections Texas businesses achieve with workers’ comp coverage.
Texas and business-friendly regulations go hand in hand. Workers’ compensation is no different, being a voluntary option for most private sector employers. However, this unique standard doesn’t mean workplace claims are absent in the market. In 2023 alone, Texas employers reported 175,900 nonfatal workplace injury and illness cases.
Investing in workers’ comp offers business leaders more security and support if a claim is filed. Explore the key advantages your company can gain from this insurance.
Effective care coverage
Healing from work-related injuries or illnesses is often a long and expensive process. Treatment and other recovery costs are significantly higher without workers’ comp coverage. Nationally, employers spent $15.7 billion on uninsured expenses related to work injuries. An on-site accident can affect a company’s financial wellness, especially for small to medium-sized businesses (SMBs) aiming to manage budgets efficiently.
With workers’ comp coverage, insured Texas companies can support an injured or ill employee without compromising their financial resources. This insurance typically covers medical bills and treatment care such as doctor visits, specialist appointments, prescriptions, rehabilitation services, and hospital stays. Depending on the circumstances, coverage may also include:
- Healthcare reimbursement
- Lost wage replacement
- Impairment and supplemental income
- Temporary or permanent disability payments
- Lifetime income for permanent disability
- Retraining, education programs, and other vocational rehabilitation
- Death and burial benefits for dependents if an employee passes away
Offering these benefits allow businesses to show their commitment to employee well-being, while maintaining control over internal financial resources.
Lawsuit protections
When a workplace accident occurs, the risk of a lawsuit can follow, especially if the injuries are severe or lead to a fatality. In either case, Texas employers without coverage may face out-of-pocket legal fees as well as any restitution.
Workers’ comp helps protect Texas businesses from these risks. In most instances, when an employee accepts workers’ compensation benefits, they waive the right to sue their employer. This compromise enables the injured worker to receive necessary care while the business avoids costly legal battles and more chances to focus on its daily operations.
Security in high-risk industries
Texas is home to diverse working environments across many industries. However, certain sectors have a greater likelihood of workplace accidents and injuries. Here’s a glimpse at the Texas industries with the largest total recordable incident (TRI) cases.*
| Industry | Total nonfatal injury and illness cases | Total fatal injury cases |
|---|---|---|
| Healthcare and social assistance |
31,100 | 11 |
| Retail trade | 28,700 | 20 |
| Transportation and warehousing | 20,200 | 119 |
| Accommodation and food services |
18,700 | 15 |
| Manufacturing | 18,300 | 32 |
| Professional and business services |
16,300 | — |
| Wholesale trade | 12,200 | 22 |
| Financial services and activities |
6,000 | 18 |
| Real estate and rental leasing |
4,000 | 14 |
| Mining, quarrying, and oil and gas extraction |
1,700 | 36 |
| Agriculture, forestry, fishing, and hunting |
900 | 15 |
*All data pulled from the Texas Department of Insurance (TDI)’s 2023 Rates of Texas Workplace Injuries and Illnesses report and the 2023 Texas Census of Fatal Occupational Injuries report.
Employees in higher-risk industries expect their employers to prioritize their safety in every aspect of operations. That’s why top-talent often gravitates toward employers that offer workers’ compensation. By adding coverage, a Texas business shows its dedication to workplace safety measures and reinforces the company’s dedication to delivering quality care and protection when it matters most.
Multistate compliance
Many Texas businesses operate outside the state to accelerate their growth and profitability. Whether hiring a remote workforce or opening additional office spaces, companies must comply with each location’s regulatory standards to succeed.
Carrying workers’ compensation makes it easier to achieve multistate compliance. Unlike Texas, nearly every other state mandates this insurance for most employers. Failing to meet these requirements can result in significant penalties like costly fines, legal action, and even business closures[SC1] . Workers’ comp coverage gives Texas businesses a head start with alternate state regulations, which smooths their transition across state lines.
ExtensisHR has your workers’ comp strategy covered
Opting into workers’ compensation provides Texas company leaders with critical legal, financial, and regulatory protections. But navigating coverage and claims, especially as a startup or SMB, can be challenging without experienced guidance. As a certified Texas PEO, ExtensisHR helps you manage every aspect of workers’ comp.
Our services and team of dedicated risk experts help you:
- Administer pay-as-you-go workers’ comp insurance that covers needs like medical benefits and wage replacement for injured employees
- Leverage coverage that complies with multistate regulations and industry standards
- Ensure all claims filed are accurately and promptly reviewed
- Set up a return-to-work program to help recovered workers seamlessly transition back into their role
- Minimize risks with updated workplace safety plans, an Employer Protection Program (EPP), and other protective measures
Let ExtensisHR offload the heavy lifting behind workers’ comp, so you can focus on providing a safe work environment that fosters and engages productive employees.
Contact us today to learn how workers’ comp insurance protects your Texas company and your people.
