Owning a business is one of your most significant investments. Commercial insurance helps you protect your investment against some of the common risks involved with operating your business on a day-to-day basis. Your employees are a valuable part of your business. Workers’ compensation allows you to take care of your employees while also protecting your business if a liability dispute arises. Here is a guide to workers’ compensation for Texas businesses.

● Texas Workers’ Compensation Insurance Explained

Workers’ compensation helps pay for your employees’ medical care if they are injured on the job. The policy also helps take care of their lost income while they are recovering. In the unfortunate event that one of your employees dies due to a work-related injury, workers’ compensation can help pay for their funeral expenses and other benefits. It’s important to remember that there are several circumstances where your employees are not covered by workers’ compensation. Your employees are not covered if they suffered self-inflicting injuries or if they are injured outside of work.

● Is Workers’ Compensation Necessary?

If you run a private business, a workers’ compensation insurance policy in Texas is not mandatory. However, if your business has a contract with government entities, you are obligated to provide workers’ compensation. If you are organizing a project, you’ll need to add workers’ compensation before you hire any independent contractors or subcontractors.

Texas workers’ compensation insurance helps to prevent you from being sued if one of your employees suffers a serious injury in the workplace. Injured employees can file a claim. If there is a disagreement between you and the employee, you can settle the dispute in district court. The workers’ compensation policy will cover any attorney fees and other costs.

If you opt not to add workers’ compensation coverage, you will not be protected in the event of a lawsuit. You are also obligated to tell all your employees that they are not protected if they suffer an injury. If you are facing litigation, you will not be able to use the defense that your employees accepted the dangers caused by a lack of protection.

● Different Ways to Provide Texas Workers’ Compensation Insurance

Self-Coverage

If you operate a large business, you may opt to self-insure your workers’ compensation policy. You will have to meet certain financial qualifications before you can proceed. You also have the option to join a self-insurance group. The other group members must be involved in the same industry as your business.

Health Care Network

You can set up a health care network or consult with an existing one to treat your injured employees. You also have the option to choose an alternative policy. However, you will lose financial protection with this type of policy.

Traditional Coverage

The most traditional way to purchase coverage is through the Texas Department of Insurance. If you have at least one employee, you should consider adding workers’ compensation.

Do you have any additional questions about business insurance? Contact the experts at First Insurance Solutions. We are ready to help you with all your coverage needs.

Workers’ compensation insurance is meant to cover the costs resulting from a work-related injury, illness, or death. However, employers, too, can benefit from this type of liability coverage. Perhaps the most obvious benefit of workers’ compensation insurance for employers is that it protects them from being sued by an employee for a work-related injury, illness, or death.

Here’s a detailed look at the three ways in which workers’ compensation benefits employers.

1. Creates a Safer Work Environment

Ranging from lost productivity to recruiting and onboarding costs, the costs resulting from a workers’ comp claim can add up quickly, causing your business to experience substantial financial losses. It costs an average of $400 and $1,300 to onboard and train an employee, respectively, as reported by the Association for Talent Development.
Moreover, an unsafe work environment is likely to cause adverse psychological and physical effects on your employees, leading to decreased employee productivity. For example, more than 25% and 50% of injured workers tend to suffer from depression and anxiety, respectively, according to a recent study. Of course, more workplace accidents mean higher workers’ comp costs and vice versa. Thus, workers’ comp costs can incentivize employers to create safer work environments for their employees, which would, in turn, assure greater employee productivity and increased returns.

2. Prevent Lawsuits

Suppose your business lacks workers’ compensation insurance coverage. In that case, if your employees and their loved ones sue you in civil court for a work-related injury, illness, or death, it can prove to be expensive. The average workers’ compensation settlement in the U.S. amounts to around $20,000. This means that if you were to lose such a lawsuit, the resulting financial loss could easily ruin your business. Additionally, it could open you up to a criminal investigation. One of the main benefits of workers’ compensation for employers is that it protects you from such lawsuits, reducing the possibility of complicated legal problems.

3. Improves Regulatory Compliance

As a business owner, you contribute to the economy not only by creating jobs but also by promoting trade. Being a productive member of society, you most likely would not wish to be on the wrong side of the law, especially because of your business activities. However, failure to carry workers’ compensation insurance coverage is a surefire way to get into legal trouble. Remember, nearly all states in America require employers to carry workers’ compensation insurance, meaning most states across the country have a workers’ comp program. While the specific workers’ comp laws may vary across state lines, the general penalties for violating workers’ comp laws include fines and/or prison time.

Thus while workers’ comp will ensure that your company is protected from financial loss, it will also assure your employees that their needs are being taken care of, thus promoting an environment of peace and security throughout the organization.

Do you have any additional questions about business insurance? Contact the experts at First Insurance Solutions. We are ready to help you with all your coverage needs.