How Can a Company Self-Insure for Workers’ Comp in Texas?

The Insurance Journal reports that the Texas Division of Workers’ Compensation (DWC) recently approved 12 companies in renewing their Certificates of Authority to self-insure their workers’ compensation claims for one year.

The Texas Department of Insurance (TDI) must certify a company that chooses to provide workers’ comp through self-insurance.

The requirements for a company to self-insure in Texas include:

• Provide information to TDI on the company’s profitability, previous workers’ comp losses and the number of employees.
• Implement safety programs at all job sites.
• Provide a security deposit that covers workers’ comp liabilities.
• Maintain a minimum of $5 million of additional insurance coverage.
• Must pay a minimum premium of $500,000 annually.
• Must have the program managed and operated by a third party claims servicer (the company itself may not handle the paying of workers’ comp to employees).

The ability to self-insure only makes financial sense for large companies. However, slightly smaller companies can enter into a group self-insured plan with four or more employers. A workers’ comp self-insurance group has different requirements, but it does require certification from TDI.

What Does Self-Insurance Mean for an Employee?

As with anything in business, companies generally make decisions on what is profitable. This means employees are an afterthought. In the case of self-insurance workers’ comp programs, companies see significant savings, which mean employees will not receive the best coverage.

Self-insurance gives a company more control to fight or deny small claims. If you are ever injured, the company can choose to not pay or fight the claim.

For this reason alone, it is important to hire an attorney who can fight the company to pay for your on-the-job injuries.

The Law Offices of Aaron Allison – Austin Workers’ Compensation Attorney

Source: http://www.tdi.texas.gov/wc/employer/cb007.html