WORKERS' COMPENSATION INSURANCE
Texas Bill Would Make Workers’ Comp Mandatory for Construction Industry
AUSTIN, Texas //BestWire// - Both chambers of the Texas legislature are considering bills that would mandate workers’ compensation coverage for building and construction contractors and subcontractors.
(Photo credit: Vadi Fuoco)This would be something of a departure for Texas, which does not require most private businesses to obtain workers’ compensation. Companies contracting with government entities are an exception and must provide coverage for employees working on the project, according to the Texas Department of Insurance.
Companies that forego workers’ comp lose out on key legal protections, according to the TDI.
Senate Bill 338, sponsored by Democrat Sarah Eckhardt, would require contractors and subcontractors to provide workers’ comp for every employee. The bill would also require subcontractors working on public projects to provide the main contractor written certificates showing they have coverage for each of their employees working on the project.
The House of Representatives bill, HB 875, would require municipalities to ensure contractors have workers’ comp coverage for any project that costs more than 1% of the municipalities most recent budget. The bill also requires contractors to get a performance bond before working on these projects.
When calculating a project’s total cost, municipalities would not be allowed to aggregate work from more than project, according to the text of HB 875, which is sponsored by Republican Rep. David Spiller.
If passed and enacted, both laws would go into effect Sept. 1, 2025.
Attempts to gain comments from the state lawmakers sponsoring the bills were unsuccessful.
In other Lone Star State news, the Texas Wind Insurance Association reported its Hurricane Beryl losses of $455 million just about equaled its catastrophe reserve trust fund balance (Nov. 15, 2024).
The five largest writers of workers’ compensation insurance in Texas during 2023, based on direct premiums written, were: Texas Mutual Insurance Co., 40.57%; Zurich Insurance US PC Group, 5.63%; Travelers Group, 5.07%; Hartford Insurance Group, 4.98%; and Liberty Mutual Insurance Cos., 3.98%, according to BestLink.
(By Steve Hallo, senior associate editor, BestWire: Steve.Hallo@ambest.com)