What Happens If a TX Business Does Not Carry Required Workers’ Compensation Insurance 

Running a business without workers’ compensation insurance can put your company at significant financial and legal risk. When an employee is injured on the job, and no valid policy exists, the employer may be held responsible for medical bills, lost wages and any resulting legal claims.

The Legal Risks of Non-Compliance

Texas is the only state that allows most private employers to opt out of carrying workers’ compensation, but going without coverage still carries serious legal risk. Texas businesses that opt out may face:

• Negligence lawsuits from injured employees, with contributory negligence, assumption of risk and fellow-employee negligence unavailable as defenses
• Administrative penalties for missing required notices to the Texas Division of Workers’ Compensation
• Personal liability for business owners and officers
• Lost contracts, since businesses working for government entities must carry coverage

A lawsuit can follow even when the underlying injury is minor.

Financial Consequences and Employer Liability

Without a workers’ compensation policy, the employer steps into the role the insurer would have filled. That means paying for medical treatment, rehabilitation, and wage replacement out of company funds. It also means defending against lawsuits that workers’ compensation would have otherwise resolved.

In Texas, an injured employee of a nonsubscriber cannot file a claim through the state workers’ compensation system and may sue the employer directly.

How We Can Help

Carrying workers’ compensation before an injury happens protects your employees and limits your exposure to injury lawsuits. We work with businesses across Center, TX to review their coverage requirements and connect them with policies that fit their contract requirements and reflect the specific risks of their industry.

Contact Shoop Insurance Agency LLC today to review your workers’ compensation coverage and request a personalized quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.