Texas Workers’ Compensation Insurance: Top Providers, Rules & More

Workers’ compensation insurance covers employees injured while on the job. Texas workers’ compensation laws are unique because they don’t require employers to have coverage. Those that do are covered for medical expenses, prescription medications, weekly wages, and other associated expenses when a worker gets injured on the job.

If you are looking for great Texas workers’ compensation insurance that covers you and your employees, The Hartford is our top choice. With fast, easy quoting and underwriting, you’ll have a policy that covers your workforce throughout Texas and extending to other states within minutes.

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Texas Workers’ Compensation Insurance Providers

Texas workers’ compensation providers include private insurance carriers and the state fund, The Texas Mutual Insurance Company. When choosing a provider, consider the price for your industry. Not every provider is the “best priced” for every type of risk. Some workers’ compensation insurance providers serve riskier industries or small businesses better than others.

Top Texas Workers’ Compensation Insurance Companies

The Hartford

The Hartford is a national name when it comes to small business insurance. It has a great reputation for managing all claims efficiently and to the satisfaction of all parties. It keeps the client and his interests in mind when building policies that have more inclusion for a lower cost. The Hartford offers all lines of business insurance, making it convenient for business owners.

The Hartford is an ideal choice for small businesses serving consumers in day-to-day life. These are low- to mid-level risk companies like offices, retail locations, and health and fitness providers. The Hartford is a company that caters to small businesses and makes it easy and convenient to combine policies.

Texas Mutual Insurance

Texas Mutual Insurance is the largest workers’ compensation insurance carrier in the state with almost three times the market share as the next largest provider. This carrier is the state insurance fund but operates as a private carrier in the market. Texas Mutual covers the widest range of risks in the state, handling industries other carriers refuse to insure.

A small business starting in a high-risk industry or dealing with previous losses will get the best pricing and insurability through Texas Mutual Insurance. The state fund is a private carrier that offers competitive rates for the risk. It will give you the best possible rates for the highest risks out there. For more information, be sure to check out our section on the Texas State Workers’ Compensation Fund below.

Travelers Group

As the leader in Texas workers’ compensation policies nationally, Travelers Group is a competitive provider of workers’ compensation insurance for Texas companies. With some of the strongest cross-state coverages, Travelers Group is competitive and comprehensive. The insurance carrier places great value on feeling like a local partner rather than the behemoth it is.

Travelers Group is an ideal option for workers’ compensation for companies that have a variety of work classifications within the company. From the receptionist to the animal handler, Travelers Group works with diverse company environments to make sure business owners get favorable rates and implement the right programs to protect employees.

AIG

AIG is a leader in commercial insurance throughout the country, offering both insurance and financial services to its clients. It works with companies on casualty risk, focusing on prevention first and claims processing second. This approach helps AIG insure high-risk industries with more favorable rating systems.

AIG is the perfect insurance carrier for Texas companies that do business outside the state, both in the United States and Mexico. AIG provides extended coverage for a mobile and extended workforce with a well-defined international presence.

Liberty Mutual

Liberty Mutual is the second-largest Texas workers’ compensation insurance provider behind the state fund. The economic growth of Texas is matched by the growth of this insurance carrier’s appetite for commercial lines of business. Liberty Mutual offers all lines of personal and commercial insurance with local agents available throughout Texas.

Liberty Mutual specializes in mom-and-pop businesses, particularly those with a few employees. While the companies do cover a wide range of risk classifications, it best serves professional and personal service companies like accountants or plumbers. Many customers appreciate that personal and business insurance can be bought and serviced in one local office.

What Workers’ Compensation Insurance Is

Workers’ compensation insurance pays the financial costs of medical bills, lost labor, and potential long-term disability payments to employees that get hurt or ill while at work. Burial expenses and death benefits are paid if an employee dies from an accident or injury incurred while at work.

What Texas Workers’ Compensation Covers

Texas workers’ compensation covers costs associated with work-related injuries. Employees are covered for medical bills, treatment, and rehabilitation. Employers are unable to take someone off the payroll if involved in a workers’ comp claim. Therefore, the insurance pays the payroll costs allowing the company to continue and hire temporary help.

The key coverages of Texas workers’ compensation insurance policies are:

• Medical expenses: Pays ambulance, emergency room, hospital, and all medical expenses pertaining to the work injury or illness
• Rehabilitation expenses: Pays for physical therapy as prescribed by the attending doctor to restore the patient back to the best possible condition
• Occupational therapy: May pay for occupational therapy and retraining so that the employee can return to work in a new capacity
• Long-term disability: Settles long-term disabilities based on the level of injury and whether the party can return to work
• Beneficiary expenses: Gives beneficiaries payment for burial expenses and settlement payments based on the loss of a loved one who dies as a result of work injuries
• Wages while out injured: Provides employees wages as if he were working while out for workers’ compensation claims
• Employer liability: Covers costs for legal fees associated with potential business liability in the claim or fighting fraudulent claims

Not every policy covers every work-related injury in the same capacity. Most policies have $1 million per injury claim limits with $2 million in aggregate claims paid per year. An illness resulting from work is not always covered by workers’ compensation insurance policies. Check with the insurance carrier to make sure you understand coverages.

Texas Workers’ Compensation Laws

Texas workers’ compensation laws express that a business can either be a subscriber or nonsubscriber to workers’ compensation. It doesn’t matter if a company is a subscriber or not, it is not exempt from the laws and is subject to civil penalties and fines. Companies that subscribe to workers’ comp plans are covered for injuries regardless of fault. Nonsubscriber companies are considered “bare” and are essentially self-insured if anyone gets injured.

Some of the most significant Texas workers’ compensation laws include:

• Non-subscribers must inform: Both employees and the Workers’ Compensation Division of the Texas Department of Insurance must receive Form DWC005
• No-fault coverage: Subscriber companies with claims offer coverage regardless of who is at fault unless part of horseplay, self-inflicted or obtained in criminal acts.
• Return-to-work-programs: Even light duty work can halt or stop workers’ compensation benefits to injured parties
• Must avoid benefits stacking: Companies are prohibited to stack benefits ― health and disability insurance ― in a manner to provide more than 100% of regular weekly wages.

Like workers’ compensation insurance programs across the country, Texas workers’ compensation insurance benefits can include medical, income, and death benefits to the injured employee or his beneficiaries.

Nonsubscriber Risks With Texas Workers’ Compensation

A company that opts out of purchasing workers’ compensation insurance in Texas is subject to civil lawsuits. Employees of nonsubscribing companies must be notified of non-insurance coverage. Should a claim arise, the Texas Department of Insurance must be notified, but the company must take care of all medical and legal costs along with wages for injured parties.

Many major corporations have elected to save the costs of workers’ compensation insurance and not subscribe. Companies like Walmart and Hobby Lobby choose to settle claims internally when employees get injured at work. Smaller companies may not be able to offset both the cost and distraction from work to survive workers’ comp claims financially.

Texas Workers’ Compensation Insurance Deadlines

There are no real deadlines to consider when looking to purchase a workers’ compensation insurance policy in Texas. However, there are a couple of timelines to understand when filing claims and stopping workers’ compensation.

Some timeline issues to consider with Texas workers’ compensation insurance are:

• Ceasing coverage notification: The language states “as soon as possible” but should be done within days of stopping coverage
• First impairment appeals: Employers have 90 days of a workers’ comp claim issuance to file a formal appeal if they feel the claim is not due to a work-related injury; the 90 days begin when the first issues of injury were noticed
• Statute of limitations: Injured parties have 30 days to notify employers of an injury; the claim must be filed within one year with the Texas Department of Insurance

Failure to meet deadlines could result in the denial of claims or appeals of claims depending on the responsible party. It can even lead to civil lawsuit judgments. Even if an employer is not covered by workers’ compensation, filing claims with the Department of Insurance is required to preserve all parties’ rights.

Call The Workers’ Compensation Division of the Texas Department of Insurance at 800-252-3439 with questions.

Texas Mutual Insurance Company: Workers’ Comp State Fund

The workers’ compensation insurance state fund is the Texas Mutual Insurance Company. It is the largest provider for workers’ compensation in the state with more than double the total premiums written of the next five providers. Small businesses aren’t required to obtain workers’ compensation from the state fund but may get better coverage if the company has previous claims or in a high-risk industry.

Examples of high-risk industries include but aren’t limited to:

• Construction
• Drilling
• Manufacturing plants
• Health care providers

Texas is a competitive insurance state when it comes to workers’ compensation with carriers further rating some industries more favorably than others. No one is required to work with the Texas Mutual Insurance Company, but it is the largest provider in the state because it underwrites the widest variety of risks. It is the biggest but not always the best priced.

Texas Workers’ Compensation Insurance Costs

Workers’ compensation insurance premiums are based on payroll costs and the riskiness of the work the employee performs. Small businesses should expect a minimum premium of $250 annually for a workers’ compensation policy. Average costs in Texas start at 75 cents per $100 of payroll but are subject to many factors including the experience modification rate (EMR).

The EMR is a factor based on company claim history. Industry standards define premium rates along with the company’s own experience rating. Carriers adjust rates based on their appetite or desire to take on certain types of business risk. While the baseline formula is the same for every carrier, it is still important to shop for the best rate.

The formula to determine business premium base costs is:

Classification code rate x EMR x Payroll per $100 = Premium

This gives a business owner of reasonably priced policies from which he gets quotes. If he has no workers’ compensation claims, and the premium is much higher than estimated by the formula, he should shop for an insurance carrier that prefers his business industry.

Texas Workers’ Compensation Rate Variations

While classification codes have standard ranges, there are many factors that go into pricing your workers’ compensation policy. If you use the formula to get a ballpark quote, be sure to shop carriers for the best pricing. Every carrier has unique underwriting methods that consider the insurance companies risk tolerance for certain business industries.

Texas Workers’ Compensation Audit

Workers’ compensation premiums are determined by estimated payroll. Payroll audits are completed annually by the workers’ compensation carrier. Because payroll is hard to predict, audits review company payroll records at the end of policy periods. Premiums are then reconciled to the actual payroll.

For example, assume a bookkeeping company in Austin has four employees, and payroll is estimated at 28 cents per $100 of payroll estimated at $120,000 of payroll ― $336 in annual premium. The premium would be $280, but if one person left the company and payroll ended up only being $100,000, then a refund is issued. If the company hires another person, that payroll cost is added in and billed to reconcile premium is sent.

Another example is a chauffeured limo service in Houston transporting executives from the airport to hotels and meetings. Assuming they have an owner who opts out of coverage and 10 drivers in the fleet with a payroll of $500,000. If the company has not had a claim in the past, it’s current rate would be $1.47 per $100 of payroll or $7,350. If one driver quit and wasn’t replaced in the last quarter, payroll would be less, and the company would get a refund of overpayment of premiums.

Part of the audit would consider claims in the policy year. If one driver was in an accident and filed a workers’ compensation claim, this would affect the EMR, increasing the renewal premium per $100.

Tips on Getting Texas Workers’ Compensation Insurance

Here are a few tips to make the process of choosing Texas workers’ compensation easier.

Set Your Employment Safety Standards

Certain industries expect a higher number of claims due to the high-risk nature of the work. However, a small business that doesn’t set safety standards, implement, train, and continually monitor activity might have a hard time getting workers’ compensation insurance. Insurance companies don’t want to insure a company that doesn’t seem to care about safety.

Be a Subscriber to Avoid Costly Lawsuits

An injured party is not able to sue an employer if he is collecting workers’ compensation benefits. Civil lawsuits can allow parties to sue for pain and suffering, regardless of whether someone is a subscriber or not. This increases the legal defense costs and potential claims paid to injured parties and their beneficiaries.

Contact a Broker to Shop Workers’ Compensation Insurance for You

Brokers work with various carriers to find the best options for small business insurance owners. They will take one application from you and then do all the work to compare rates, coverage options and suitability for your specific company.

If you are unsure where to start or feel overwhelmed at the idea of spending the entire day on the phone, Insurance321 is perfect for you. With a 30-second online application and a five-minute phone call, it will dive into getting you covered.

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Texas Workers’ Compensation Frequently Asked Questions (FAQs)

Companies have much to consider when buying workers’ compensation insurance in Texas. If you still have questions, visit our forum. Making sure Texas business owners have the right answers is our top priority.

1. How Much Does Workers’ Comp Cost in Texas?

Small business owners opting into workers’ compensation coverage will have premiums vary from industry to industry. On average, Texas businesses pay 75 cents per $100 of payroll for workers’ compensation insurance. Minimum policies start around $250 for Texas workers’ compensation insurance.

2. How Do You Calculate Workers’ Comp Percentage?

Your workers’ comp wage percentage caps at 88% of your average weekly wage (AWW). This could be lower if you are newer to the company or recently had a wage adjustment. The claims adjuster will collect your pay history and determine your weekly wage allocation.

3. How Long Does Workers’ Comp Last in Texas?

Workers’ compensation is paid as temporary income benefits (TIB) weekly. This lasts until the worker is determined to reach maximum medical improvement (MMI) or returns to work. Most TIB limits are a maximum of 104 weeks, although some exceptions apply, depending on the injury and recovery requirements.

4. Can You Get Fired After Workers’ Comp?

Texas is considered an “at-will” state, meaning companies can fire employees for any reason with or without cause at any time. This means that injured employees could potentially be let go during a workers’ compensation claim because of specifically defined employment contract terms.

5. What Happens If I Lose My Health Insurance Because of a Work Injury?

If you lose your health insurance due to a workers’ compensation claim, you qualify for COBRA. Keep in mind that workers’ compensation claims should be paid by your employer and have no dollar limits to coverage. Other medical bills would be covered by health insurance.

The Bottom Line

Even though workers’ compensation insurance isn’t required in Texas, it is an important protection for every business owner that can’t pay employee claims. When employees get hurt at work, workers’ comp pays for medical attention, medications, physical therapy and weekly wages. Pricing varies among insurance companies.

Get competitive pricing for the right workers’ compensation coverage in Texas by visiting The Hartford. In a few minutes, you’ll be able to get all your business insurance needs quoted. Its experienced small business agents will help you classify your risk and get you protected today.

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