At least a half-million Texas workers have no occupational insurance coverage, either from workers’ compensation or from a private equivalent, Texas Department of Insurance officials said Tuesday.
Texas is the only state in the country where the decision to carry workers’ compensation insurance or a private equivalent is voluntary for companies of any size. All other states mandate occupational insurance coverage.
In Texas, if an employer subscribes to an approved workers’ compensation policy, that serves as a bar to a personal injury lawsuit. Workers’ comp will be the injured party’s only remedy against their employer. If the worker dies, the bar against suit does not remain intact in a wrongful death claim.
People who suffer workplace accidents can sue employers without workers’ compensation insurance directly. Unfortunately, the businesses that forego paying for workers’ comp often have few assets, so there is no one to sue and no money to recover. Workers’ compensation nonsubscriber claims are a mixed bag – you won’t know what policy (if any) or what assets a potential defendant has without suing them, which costs an already injured party money.
Only a tiny percentage of Texas employers comply with requirements to notify the state about their workplace coverage or lack thereof. In 2012, 81 percent of Texas employees were covered by workers’ compensation insurance. Of the uninsured, about 70 percent have some type of private occupational insurance (of varying quality and benefits).
State legislators are discussing proposals to make workers’ compensation coverage mandatory for at least danger-prone industries such as construction.