Texas workers' compensation insurance: Your guide to requirements and getting a policy
If you’re a Texas employer looking to protect both your business and your team, you’re in the right place. At Beyond, we provide the essential information you need to understand how workers’ compensation works and how to stay compliant.
If an employee is injured or becomes ill on the job (and is unable to work for an extended period), workers’ compensation insurance can provide funds for medical treatment and partial wage replacement during recovery. Additionally, this insurance protects employers from litigation related to workplace injuries. Employees covered by workers’ compensation are generally not allowed to sue their employers for damages resulting from work-related injuries or occupational illnesses.
For employers who offer coverage, here are the most common benefits employees may receive, according to the Texas Department of Insurance:
These benefits (excluding impairment income) help replace lost income. Types include:
Covers reasonable and necessary medical care for work-related injuries or illnesses.
Burial benefits help reimburse funeral expenses paid by a family member or other party.
Provides financial support to surviving spouses and family members. Notably, spouses of first responders may receive lifetime benefits even if they remarry (for marriages after Sept. 1, 2017).
Texas law does not require private employers to carry workers’ compensation insurance, except for those doing business with government entities. These employers must maintain a policy to protect workers on state-related projects.
Employers without coverage are still legally required to:
Submit Form DWC 005 to the state
Post a written notice (in English, Spanish, and relevant languages) in a visible area
Use the DWC-adopted Notice 6 format
Provide new hires with a written notice of non-coverage
Employers should only buy policies from insurers licensed by the Texas Department of Insurance. A policy from a non-licensed carrier will not be considered valid under Texas law.
Some employers may self-insure, but they must meet financial requirements and obtain approval from the Division of Workers’ Compensation (DWC).
Employers in similar industries may form a group self-insurance program, which must also be approved by the Texas Department of Insurance.
Although Texas does not penalize private employers for not carrying workers’ compensation insurance, businesses are still required to provide a safe workplace. Administrative penalties may apply if an employer carries a policy but fails to comply with related responsibilities.
Once an employee reports an injury, the employer must:
File DWC Form-001 with their insurance carrier within 8 days (or immediately if it’s a disease or death).
Give a copy of the completed form and Employee’s Rights and Responsibilities to the employee.
Contact their insurer to confirm acceptable reporting methods.
An employee must:
Notify their employer of the injury within 30 days
File a formal claim within 1 year of the incident to qualify for benefits
While Texas does not mandate workers’ compensation for most employers, it can be a smart decision from both a financial and legal perspective. For employees, it ensures medical and income support in the event of a work-related injury or illness. For employers, it offers protection from costly lawsuits and supports a safer, more resilient workplace.
Have questions about securing coverage for your business? The Beyond team is here to help.
