November 21, 2019

An employee getting injured on the job is a concern all employers have, no matter the size of their business. Workers' compensation, also known as workers' comp, is a way to ensure your business is protected and your employees are covered in the event of a workplace injury, making it a good choice for both parties. Don't know exactly what workers' comp is or where to even start? Or maybe you’re familiar with it but want to learn exactly how it works. You're not alone. Workers' compensation insurance is less widely known than other forms of insurance policies most people have like health insurance and car insurance. In this article, you'll learn the basics about workers' comp so you can take the first step toward protecting your business and your best business asset – your people.

What is workers' compensation?

Simply put, it's a type of insurance that provides coverage for you, your employees and your business when:

• An employee is injured on the job
• An employee has a disease or disorder that is caused by their working conditions (known as an occupational disease)
• An employee is killed on the job

Do I need workers' comp?

While Texas is one of the few states that does not require businesses provide workers' comp coverage, there is no equivalent for the protection it provides. However, there are some businesses that are required to have it, like public employers or employers who enter into construction-related contracts with a governmental entity. Businesses that provide workers’ comp are called “subscribers” while those who do not carry workers’ comp are called “nonsubscribers.”

Here’s how workers’ compensation coverage compares to other options:

• Workers' comp insurance: Provides the best protection against the consequences of a workplace injury. As a subscriber, you can benefit from legal protection as well as medical and income benefits for your injured employees.
• No insurance, aka going bare: Operating without workers' comp coverage adds extra risk and means you are self-insured. Injured employees don’t receive support to cover their injury unless the employer pays out-of-pocket. As a nonsubscriber, you can also be exposed to potential lawsuits from injured employees.
• Occupational accident insurance: Alternative policies provide limited coverage, meaning you may be responsible for your injured employees’ medical expenses and lost wages. Alternative coverage can also expose you to potential lawsuits from injured employees.

To learn more, check out a detailed coverage comparison in our Don't Dare to Go Bare resource.

What does workers’ comp cover?

Workers' comp provides the best protection against the consequences of on-the-job injuries, for you and your employees, regardless of fault.

This protection comes in two forms:

• Legal protection: Workers’ comp coverage provides you with protection from potential lawsuits from injured employees. Without insurance, you could bear financial responsibility for a workplace injury if your company is found negligent.
• Medical and income benefits: Workers’ comp covers associated medical costs required to treat the injury or illness as well as a portion of the injured employee’s lost wages due to the compensable injury or illness.

*Medical costs and lost wages can get expensive. To see how occupational injuries and illnesses can affect your business, check out OSHA's cost calculator.

As an employer, an on-the-job injury can be stressful and overwhelming. You may not know how to proceed or how to best help your injured employee. As the state’s leading provider of workers’ compensation insurance, we can help. Texas Mutual is committed to helping our policyholders protect their businesses and create a safer workplace for their employees. 

This is the first of two articles in our workers’ comp basics series. Read part two to learn how you buy workers’ comp and what you can expect if you choose Texas Mutual. You can also explore our website for more resources.