Workers’ Comp: In or Out?

By Jack Ogden, Senior Marketing Specialist

By Jack Ogden,
Senior Marketing Specialist

Maybe it’s a product of an independent spirit forged during the early days of the Republic. Or maybe it’s an inherent need to be difficult. Whatever the reason, we Texans pride ourselves on being unique. Look no further than our workers’ compensation system for proof.

Texas is the only state that allows employers to go without workers’ compensation coverage. Those who opt out of the system are called nonsubscribers. If you are one of them, you are putting your business at risk.

Under Texas law, workers’ compensation benefits are the injured worker’s sole source of recovery from an employer who carries workers’ compensation coverage. Translation: Injured workers cannot sue their employers for pain and suffering damages resulting from workplace injuries. The law does allow exceptions in cases of gross negligence by the employer.

Nonsubscribers, on the other hand, bear complete financial responsibility for an employee’s injury or death if they are found negligent. The total amount they could be responsible for is unlimited. In short, going “bare” could cost you your business.

Some nonsubscribers choose occupational accident policies or other alternate coverages. Unfortunately, these policies’ shortcomings far outweigh any potential cost savings.

Most importantly, alternate coverages do not offer the comprehensive legal protection for employers that workers’ compensation coverage offers. They also do not provide as well for injured workers.

Workers’ compensation policies cover medical expenses related to compensable injuries, and they replace a portion of injured workers’ lost wages, for life if necessary.

Alternate coverages, on the other hand, typically put caps on injured workers’ benefits, which can hit home hard in cases of severe accidents that require extended medical treatment and time off work.

Alternate coverages also typically leave gaps in coverage, refuse to cover some injuries and illnesses, and may not cover claims if the carrier becomes insolvent.

Nobody can predict when a workplace injury will occur or how much it will cost. Workers’ compensation insurance provides a measure of protection that can help ensure a business stays in business.

Employers who want the peace of mind that comes with purchasing a workers’ compensation policy should work with their insurance agent. For more information about workers’ compensation insurance, visit the Texas Department of Insurance, Division of Workers’ Compensation at and Texas Mutual at

About the author

Jack Ogden is the safety group manager at Texas Mutual Insurance Company. He is a certified insurance counselor with 16 years’ experience in workers’ compensation. Jack works closely with insurance agents to help them get the most value out of their partnership with Texas Mutual.

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