Is Workers’ Compensation Insurance Required in Texas?
Texas Labor Code, Title 5, Sub. A, Sec. 406.002. “ (a) Except for public employers and as otherwise provided by law, an employer may elect to obtain workers' compensation insurance coverage.”
Although it is not a legal requirement, virtually every company realizes that they need some sort of coverage for workplace accidents and injuries. One alternative is Occupational Accident Insurance. It may sound like a viable alternative, but, as is often the case, experience can be a a cruel teacher.
We took on a customer who had purchased accident insurance instead of Worker's Compensation coverage. One of the client’s employees dropped a heavy object on his foot causing several broken bones. the "on the job accident policy" paid for the medical costs incurred and he continued to pay the salary of the worker for his lost time from work.
Despite the good faith effort on the part of the employer, the employee filed a $1.3 million lawsuit against the employer. Despte the fact that he had occupational accident insurance, he spent more than two years enduring countless depositions, stress, uncertainty, and incurring significant defense costs.
The lawsuit brought to light the immense value in the "sole remedy" provision under Worker's Compensation law. This provision eliminates the potential of being sued by an employee for an accident covered by workers’ compensation coverage. The client told me that he would "never again" go without workers comp coverage whether it was required or not in Texas.