Workers’ Compensation Insurance Coverage for Texas Employers: Know the Texas Law–TDI


Workers’ compensation insurance coverage provides covered employees with income and medical benefits if they sustain a work-related injury or illness. Except as otherwise provided by law; Texas private employers can choose whether or not to provide workers’ compensation insurance coverage for their employees. Except in cases of gross negligence or an intentional act or omission of the employer, workers’ compensation insurance limits an employer’s liability if an employee brings suit against the employer for damages. Certain building or construction employers who contract with governmental entities are required to provide workers’ compensation coverage for each employee working on the public project. Some clients may also require their contractors to have workers’ compensation insurance. Providing Workers’ Compensation Insurance If employers choose to provide workers’ compensation, they must do so in one of the following ways:

• purchase a workers’ compensation insurance policy from an insurance company licensed by the Texas Department of Insurance (TDI) to sell the coverage in Texas;

• be certified by the Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC) to self-insure workers’ compensation claims; or

• join a self-insurance group that has received a certificate of approval from the TDI. Note: Political subdivisions may self-insure, buy coverage from insurance companies, or enter into inter-local agreements with other political subdivisions that self-insure. EMPLOYER RIGHTS Covered employers have the following rights:

• the right to contest the compensability of a workers’ compensation claim if the insurance carrier accepts liability for payment of benefits;

• the right to be notified of a proposal to settle a claim or of any administrative or judicial proceeding related to resolution of a claim (after making a written request to the insurance carrier);

• the right to attend dispute resolution proceedings related to an employee’s claim and present relevant evidence about the disputed issues; • the right to report suspected fraud to the TDI-DWC or to the insurance carrier;

• the right to contest the failure of the insurance carrier to provide required accident prevention services; and

• the right to receive return-to-work coordination services as necessary to facilitate an employee’s return to employment.

To dispute a workers’ compensation claim, an employer may file the DWC Form-004, and the DWC Form-045, Request to Schedule, Reschedule or Cancel a Benefit Review Conference (BRC), which may be obtained from the TDI website at form20employer.html or by calling 1-800-252-7031. Non-Reimbursable Employer Payments An employer is not entitled to and cannot seek reimbursement from the employee or insurance carrier if after a work-related injury or illness they voluntarily:

• continue to pay the injured employee’s salary continuation; or

• pay the injured employee salary supplementation to supplement income benfits paid by the insurance carrier. Employer Voluntary Payments of Benefits An employer may voluntarily pay income or medical benefits to an employee during a period in which the insurance carrier has: • contested compensability of the injury;

• contested liability for the injury; or

• has not completed its initial investigation of the injury. Note: an employer is only allowed to pay benefits in this situation for the first two weeks after the injury. For reimbursement, the employer is required to timely report the injury to the insurance carrier and to let the insurance carrier know, within 7 days of beginning voluntary payments, that voluntary payments are being made. The insurance carrier is only required to reimburse the employer for the amount of benefits the insurance carrier would have paid. If the employer made payments in excess of what the insurance carrier would have paid, the excess amount is not reimbursable, unless there is a written agreement between the injured employee and the employer that the excess amount can be recouped from future impairment income benefits paid by the insurance carrier, if any. The employer must file the DWC Form- 002, Employer’s Report for Reimbursement of Voluntary Payment. The DWC Form-002 may be obtained from the TDI website at form20employer.html or by calling 1-800-252-7031.


Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.

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