Statutory Workers Compensation Insurance is called that because the policy form is and was generated by the Texas Legislature. The insurance companies simply file rates based upon what they think they can survive using the policy form provided to them by the state. The administration of claims and benefits is also regulated by the state. The whole issue began back in the early 1900’s as companies were in need of protecting themselves from financial ruin due to a work related injury while employees at the same time needed benefits to cover their medical costs, lost wages and compensation for lifetime impairments all the way up to death. Therefore there are two parts to the statutory policy. One is known as Part A which provides unlimited medical benefits, 70% of lost wages for up to 8 years, and a benefit for impairments which basically provides compensation equal to 75% of an injured employees average wage times 3 per each one percentage point of certifiable impairment rating issued by an approved medical provider. A burial benefit is also provided to help the survivors handle funeral expenses of $10,000. Death benefits for survivors are very generous and are as follows: 75% of the deceased employees weekly average salary and is paid to the spouse for the rest of his or her life unless that spouse remarries. If there are dependent children when the employee dies the children get half the benefit and the spouse gets the other half. A child can get death benefits up to age 18; or until age 25 if the child is enrolled as a full-time student in an accredited college or university. If there is more than one eligible child, benefits are re-distributed equally among the remaining eligible children when one or more are no longer eligible. Children 18 or older must show proof of enrollment to remain eligible.
The other is Part B which provide the liability exposure to the employer of in most cases $1,000,000. This is only available in workplace death claims relating to wrongful death. This provides another form of compensation to surviving family members but requires in most cases litigation to collect. The state legislature however made subscription by employers to such coverage as voluntary rather than like most states mandatory. Hence the creation of products providing alternative coverage often referred to as non-subscription to workers compensation. These insurance products range from bare minimum coverage for occupation accident (Part A) to products that carry both Part A&B with up to $5,000,000 is liability limits.