Texas employers can opt out of the workers’ compensation system; however, they can be held liable in tort if proven negligent in causing a worker’s injury since they waive the legal defenses available to employers subject to workers’ compensation laws. Nonsubscribers may not argue that the employee’s own negligence or the negligence of another worker contributed to the accident or that the employee voluntarily assumed the risk of injury. A court may order a nonsubscriber to pay for pain and suffering and punitive damages.
There are two types of non-subscriber policies: occupational accident and employers excess indemnity. Occupational accident insurance allows an employer to provide benefits similar to those afforded under workers’ compensation laws. Employers excess indemnity insurance reimburses the employer for liability settlements and judgments applying to pain and suffering, permanent disfigurement and lost future earnings.
