From Spindletop to the Silicon Hills, 100 Years of Workers’ Comp in Texas

We couldn’t let September slip by without acknowledging the 100th anniversary of workers’ compensation in Texas. This is an exciting time for your friends at Texas Mutual. After all, workers’ comp is all we do, and we it better than anyone else. We want to take this opportunity to highlight a few milestones in the workers’ comp system we know and love.

Pirates gave as well as they took
History regards 18th century pirates as greedy, ruthless scofflaws. Within their ranks, however, they could be quite judicious. In fact, they developed a sophisticated system for compensating injured crew members.

Loss of an eye entitled the worker to about 100 pieces of eight (Spanish dollars). Loss of a right leg was worth 500 pieces, which was 100 pieces more than loss of a left leg. Go figure.


To encourage investors, oil was allowed to flow openly at Spindletop.
Courtesy Texas Energy Museaum

Black gold
On January 10, 1901, Anthony Lucas struck oil at Spindletop near Beaumont. The ensuing boom made Texas a player in the national economy. It also presented a quandary for the Legislature.

Oil and gas jobs are among the most hazardous in the country. Texas, like other industrial states, needed a standard means of protecting workers from on-the-job injuries. The Legislature responded by creating our first workers’ compensation system in 1913.

Fixing a broken system
By the late 1980’s, the Texas workers’ compensation system was broken. Premiums were skyrocketing for employers. Furthermore, injured workers were not getting well and returning to the job at the same rate as their counterparts in other states. In an effort to fix the system, the Legislature passed two significant bills over the next 15 years.

Senate Bill 1 (“The New Law”), 1989

  • Raised benefit levels for injured workers
  • Established an administrative process for resolving disputes informally when possible
  • Set medical fee and treatment guidelines to control costs of care
  • Expanded state-administered workplace safety programs
  • Created the Texas Workers’ Compensation Commission (TWCC)

House Bill 7, 2005

  • Authorized insurance carriers to establish or contract with workers’ compensation health care networks
  • Abolished the TWCC and transferred its duties to the Division of Workers’ Compensation
  • Created the Office of Injured Employee Counsel to help injured workers resolve benefit disputes with insurance carriers

This article from the summer 2005 edition of Texas Mutual’s policyholder newsletter provides a good look at HB 7.

Out of the rubble
In the spirit of saving the best for last, we withheld one important provision of S.B. 1: It created the Texas Workers’ Compensation Insurance Fund. Ten years later, the Legislature authorized us to operate as a domestic mutual company. Today, Texas Mutual Insurance Company is the state’s leading provider of workers’ comp insurance.

CiCi’s Pizza Franchisee Bob Westbrook is just one of 54,000 Texas employers who rely on Texas Mutual for reliable, affordable workers’ compensation coverage. In this short video, Bob explains how our dividend program boosts his bottom line.

Here’s to 100 more years
When the workers’ comp system debuted, oil and gas was king in Texas. But our economy no longer hangs its 10-gallon hat on a single product. From the tech-rich Silicon Hills of Austin to the manufacturing hub of the Valley, our diverse economy is the envy of the nation.


McFaddin Drill No. 10, Guffey & Galey, Spindletop
Courtesy Texas Energy Museum

During all of this evolution, a few things have remained constant: 1. Whether on a construction site, in an oil field or in the relatively safe confines of an office, workers get injured on the job. 2. Workers’ compensation insurance is here to help ease their financial burden and get them back on the job.

Happy anniversary to the Texas workers’ comp system. Here’s to another 100 years of protecting workers and their employers from the consequences of on-the-job injuries.


2 Responses to From Spindletop to the Silicon Hills, 100 Years of Workers’ Comp in Texas

  1. Pingback: Oil and gas: A different kind of crisis | Texas Mutual Insurance Company blog

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