The Texas legislature is reviewing two bills that could require building and construction contractors and subcontractors to provide workers’ compensation coverage.
The proposed legislation represents a potential shift for the state, where most private businesses are not mandated to carry workers’ compensation insurance. Currently, only companies contracting with government entities must provide coverage for employees working on public projects, according to the Texas Department of Insurance (TDI).
According to AM Best, the proposed Senate Bill 338, introduced by Democratic Sen. Sarah Eckhardt (pictured above, right), seeks to mandate workers’ compensation coverage for all employees of contractors and subcontractors.
Additionally, subcontractors working on public projects would need to supply written certification to the main contractor confirming their employees are covered.
House Bill 875, sponsored by Republican Rep. David Spiller (pictured above, right), proposes requiring municipalities to ensure contractors have workers’ compensation coverage for projects exceeding 1% of a municipality’s most recent budget.
The bill also includes a requirement for contractors to secure a performance bond before commencing work on such projects. Under the proposed legislation, municipalities would be prohibited from combining costs from multiple projects when determining whether a project exceeds the budget threshold.
If enacted, both bills are set to take effect on Sept. 1, 2025.
Elsewhere, the Texas Windstorm Insurance Association (TWIA) reported that losses from Hurricane Beryl totaled $455 million as of Nov. 15. This figure nearly matches the balance in TWIA’s catastrophe reserve trust fund.
Data from AM Best revealed that the five largest writers of workers’ compensation insurance in Texas during 2023 based on direct premiums written were Texas Mutual Insurance Co, which held a 40.57% market share; Zurich Insurance US PC Group, with 5.63%; Travelers Group, with 5.07%; Hartford Insurance Group, at 4.98%; and Liberty Mutual Insurance Cos, at 3.98%.
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