Texas was the first state to allow employers to opt out of providing workers’ compensation benefits, and many employers have taken advantage of this and opted out. Some employers purchase an injury insurance policy to provide benefits to workers injured on the job. In some cases, the employer may deceive the worker into thinking that the insurance policy provides workers’ compensation benefits. However, these two types of insurance are very different.
How Are Injury Insurance Policies Different From Workers’ Compensation Insurance?
There are critical differences between workers’ compensation and injury insurance that affects workers’ rights to compensation and their claims. Some of these differences include:
- What they are. Workers’ compensation is a state-regulated insurance program that employers purchase. It pays injured workers’ medical bills and some of their wage losses. An injury insurance policy is an insurance policy that non-subscriber employers purchase, and it provides some degree of protection for injured workers up to the policy’s limit of liability.
- Cost. Injury insurance can cost significantly less than workers’ compensation insurance—approximately 30 percent less.
- What they cover. Workers’ compensation is a benefit like unemployment compensation or disability payments. It pays all related medical bills, a portion of the employee’s lost wages, and legal fees. An employee is not entitled to pain and suffering damages generally and cannot file a lawsuit against his employer for additional compensation. When purchasing an injury insurance policy, an employer can control the type and amount of coverage to provide to injured workers. It covers the worker’s medical bills and lost wages up to the insurance policy limits. However, the employer remains liable for the full amount of compensation that is owed to the employee for medical bills, lost and future wages, pain and suffering, and in some cases, punitive damages as a non-subscriber employer. An employee can file a lawsuit against his employer.
Did you suffer a workplace injury and work for a non-subscriber employer? Start an online chat or fill out our convenient online form to schedule a free consultation to discuss your situation and obtain advice on the next steps you should take.