Texas is the only state that doesn’t make workers compensation insurance mandatory for at least some employers. This is a shame, because workers’ compensation insurance is beneficial to both employees and employers as Sally Spooner, a school teacher, and the Cody School District, her employer, recently found out.
The Cody School District is the local school district in Cody, Wyoming. Recently, the district decided to discontinue providing workers compensation insurance for their employees as the superintendent and school board felt that $175,000.00 in annual premiums was not a good way to save money for the district. They couldn’t have been more wrong. One of their teachers, Sally Spooner, slipped and fell and ended up having to have her right let amputated just below the knee after suffering serious injuries. Now, this incident will likely cost the district far in excess of what they would have paid in annual workers’ comp premiums.
This incident illustrates the give and take of the workers’ compensation system. For employers, workers’ compensation insurance protects them from the big money judgments for pain and suffering, loss of future earning capacity, loss of consortium, disfigurement, etc. Typically, workers’ compensation claimants recover their medical expenses, lost wages and some kind of future impairment benefit. They downside for the employer is that workers compensation is no-fault insurance. Thus, even if an employee is injured through no fault of the employer, the insurance compensates the claimant. For the claimant, obviously they receive benefits without having to prove fault–and typically those benefits start being paid very quickly versus the length of time it would take if you had to prove negligence in a court of law. However, the injured claimant gives up the right to sue their employer for their employer’s negligence in causing the injury. Thus, the injured party cannot recover the big money damages that we often hear about in the news. Thus system serves both parties equally. But more importantly, providing workers’ compensation insurance for employees is the right thing to do. Just look at the comments to the hyperlinked article about Ms. Spooner, above, to see what I mean.