The biggest reason most employers elect to provide workers’ compensation benefits is to avoid the risk of litigation. An employer who provides workers’ compensation benefits to injured workers cannot be sued by the employee (or third parties) for work related injuries. Workers’ compensation benefits provided under the state system are an employee’s “exclusive remedy,” and employees who accept the benefits are prohibited from instituting lawsuits against their employers for on-the-job injuries. Tex. Lab. Code § 408.001.
In contrast, non-subscribers may be sued by an injured employee. The risk of litigation exposure is a significant disadvantage that should be carefully weighed and considered before an employer elects to opt out. Depending on the employers’ financial stability and if the injury was significant, defending a major lawsuit could be devastating to the employer, regardless of the outcome of the litigation.
And even defending the lawsuit has additional challenges for non-subscribers because they are limited in the defenses that may be asserted. For instance, if a jury determines that an employer was negligent in any way – even if the injured employee’s negligence played a more significant role in causing the injury – the non-subscriber is fully responsible for all damages that are awarded. Because of these additional challenges, it can be critical for non-subscribers to rely upon defense attorneys intricately familiar with the challenges facing non-subscribers.