Workers Compensation Insurance in Texas

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Workers Compensation Insurance Texas

Also providing insurance to residents in Colorado, Kansas, New Mexico, and Oklahoma

What is workers compensation insurance?

The workplace can be filled with potential risks and hazards, even when rigorous safety protocols are in place. Should something cause an employee to be injured while on the job, a Texas employer could be held financially liable if workers compensation insurance isn’t in place.

Workers compensation insurance helps protect businesses and their employees from the financial impact of workplace injuries and illnesses. It’s beneficial for both parties to have coverage in place. 

Which Texas businesses need workers comp insurance?

Unlike most states, Texas generally doesn’t require that private employers carry workers comp insurance. Most employers should have coverage, though, as an injury can be financially devastating.

If a business opts out of workers compensation, they’re likely open to being sued by any employees that sustain an on-the-job injury. 

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Workers Compensation Insurance Texas

What expenses does workers comp insurance cover?

When an employee suffers a covered workplace injury or illness, workers comp insurance typically covers expenses that are directly related to the injury or illness. Commonly covered expenses include:

Medical expenses

Rehabilitation costs

Partial lost wages

Death benefits

Because policy terms can vary, however, employers should have a knowledgeable insurance agent review a particular policy’s protections. An agent who specializes in workers comp will be able to check what expenses the policy would pay, and explain how that policy’s terms compare with what other policies offer.

What types of injuries and illnesses does workers compensation cover?

Workers compensation generally covers injuries and illnesses that are caused by employees’ work. These might include:

Long-Term Injuries (e.g. repetitive motion injuries)

Sudden Injuries (e.g. machinery accidents)

Sudden Illnesses (e.g. poisoning)

Long-Term Illnesses (e.g. asbestos exposure)

Injuries might not be covered when employees are obviously and/or intentionally violating company policies.

Workers Compensation Insurance Texas

How are workers compensation premiums calculated?

Workers compensation premiums are calculated based on several factors, including:

  • Type of work employees do
  • Total payroll for all employees
  • Safety record and training procedures
  • Safety policies and procedures
  • Number and severity of recent claims

In most cases, each job is classified according to the type of work employees do, and each classification is assigned a risk factor. The payroll for each job classification is then multiplied by the risk factor to determine the premium.

What are NCCI classification codes for workers compensation?

The standard system by which jobs are classified is developed and updated by the National Council on Compensation Insurance (NCCI). The NCCI classification system uses four-digit codes to indicate different jobs. The following are a few examples:

  • 0005: Nursery farming
  • 2041: Chocolate and cocoa production
  • 7038: Small watercraft sightseeing
  • 8803: Financial accounting and auditing
  • 8829: Convalescent homes and nursing homes

The specificity of NCCI codes can be quite detailed. For instance, 2143 designates cider manufacturing, 5190 designates holiday and Christmas decorators, and 0079 designates vineyards.

Workers Compensation Insurance Texas

Can a business self-insure for workers compensation in Texas?

Because workers compensation isn’t legally required in Texas, some larger businesses choose to self-insure. Self-insuring can save a business from paying premiums, but it exposes businesses to major risks if there’s a workplace accident. 

Smaller businesses usually don’t have the financial resources to fight or pay a claim, and therefore probably shouldn’t self-insure.

Before any business, including a larger one, decides to self-insure, they should first speak with a specialized insurance agent. An agent who’s well-versed in workers compensation can discuss the tradeoffs of self-insuring and purchasing insurance. The agent will also be able to help insurers see how much purchasing insurance would cost, and it’s usually quite affordable when compared to the risks of self-insuring.

How can businesses get workers compensation insurance?

If you need assistance with workers compensation insurance in Texas, reach out to the independent insurance agents at Kirk Insurance Agency. Our experienced team can guide you through the process of getting quotes and purchasing a policy. We’ll make sure your business is well-insured against workplace injuries and illnesses.

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