Private employers in Texas can opt-out of workers’ compensation insurance. That might seem like an easy way to control business expenses. It could turn out to be one of the costliest business decisions you will ever make.
Workers’ compensation is required in every state except Texas. It is important to understand how non-subscribing could impact your business. It could cost your company a lot of money if one of your employees gets hurt on the job. By non-subscribing, you might open your company up to significant judgments.
Alternative coverage carries risks
Workers’ compensation controls the damages injured employees can collect. Those protections are not in effect if you do not take part. Companies that opt-out must provide alternative insurance coverage. They might also end up paying injured worker’s damages.
Alternative insurance often limits your liability protections. In a major lawsuit, you could end up paying extensive attorneys’ fees. Non-subscribing Texas companies are also subject to negligence lawsuits.
You must protect your company against a variety of issues
The circumstances of your case matter if an employee files a case against your non-subscribing companies. You will have to defend your company against a variety of matters, including:
- Negligence. If the employee can prove your company is partially at fault, the company might be held liable. The employee might be able to argue that you did not provide training, fix problems or provide necessary safety equipment.
- Posted notice of your company’s non-subscribing status and available options.
- Retaliation. Consistent with workers’ compensation laws, you cannot retaliate against an employee who files a claim or lawsuit.
Understand your rights and how to protect yourself and your company
It is important to understand the consequences of being a non-subscribing company. The issues and circumstances matter and they could affect your company.