UNDERSTANDING WORKERS’ COMPENSATION INSURANCE
If you are a subscriber but then cease providing coverage, you must likewise notify the DWC that coverage has ceased via DWC Form-005. If your or - ganization is located in Texas, whether you are a non-subscriber or not, you should familiarize yourself with the timing requirements for submission of forms to the DWC as well as required notices, which can be found on the Tex - as Department of Insurance website. There are several ways to provide cov - erage in Texas, including, for example, through a licensed insurance distrib - utor, by self-insuring, or by joining a self-insurance group. Each of these options carries certain requirements, such as the size of your business and its financial capacity to self-insure, which you should consider when determining which option is right for you. If you decide to provide workers’ com - pensation coverage for your employees, you are considered a “subscriber” and are protected from lawsuits based on work-related injuries for covered employees. This is because the Texas Workers’ Compensation Act requires prompt payment of claims for medical expenses and lost wages for injured covered employees. If you decide not to provide workers’ compensation insurance, as a non-sub- scriber, you risk being subject to law - suits based on work-related injuries. Though it is not required, it should be noted that most Texas employees are covered by workers’ compensation in - surance. However, some larger entities prefer to either self-insure or remain as non-subscribers.
Workers’ compensation coverage is a legal safety harness protecting your operation from potential liabilities.
BY KATIE STAHL, SENIOR COUNSEL, MUDD LAW
It is imperative for your organization to thoroughly evaluate its workers’ compensation insurance coverage before any staff members are injured on the job. Ensuring your organiza - tion has adequate insurance protects your employees and safeguards your business from potential legal and financial liabilities. Determining whether your organiza - tion is legally required to provide this coverage under your state’s laws is es - sential, as regulations—e.g., minimum employee thresholds, eligible employee types, exemptions, and even the level of coverage required—can vary significant - ly from state to state. Compliance with these laws and any related regulations is crucial to main - taining your organization’s integrity and operational stability. In some states, non-compliance is not just a legal risk—it could bring your business to a standstill. This guide will explore the workers’ compensation laws and regulations of five example states.
However, some private companies must provide coverage for their on-site employees when they contract with government entities. While not re - quired, coverage may be a good idea to mitigate financial risk and to obtain certain protections when a lawsuit is filed against an organization for on-the- job injuries. If you do not provide coverage, you are considered a “non-subscriber,” and there are specific requirements you must follow including: filing an annual notice with the Texas Department of Insurance Division of Workers’ Compen - sation (DWC); posting certain notices in office spaces and worksites; and informing workers in writing that they are not covered by workers’ compensa - tion insurance. Further, a non-subscriber with four or more employees must report to the DWC: any on-the-job injuries sustained by an employee that cause them to miss more than one day of work; illnesses that occur as a result of an employee’s occupation; and fatalities that occur from an on-the-job injury. These must be reported by the seventh day of the month following the occurrence. There are exemptions from this reporting re - quirement for certain types of employ - ees, including domestic workers and ranch and farm hands, among others.
OKLAHOMA: MANDATORY FOR MOST
In Oklahoma, as in most other states, employers with five or more employees are generally required to provide work - ers’ compensation insurance. They can purchase this insurance from either a private insurance company or Comp - Source Mutual Insurance Company, a state-created entity offering coverage for both public and private employers in Oklahoma. Alternatively, employers can fulfill their workers’ compensation obligations by self-insuring as an own-
TEXAS: DESIRED BUT NOT REQUIRED
Texas is one of the few states that does not require an organization to main - tain workers’ compensation coverage.
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