Occupational accident insurance coverage provides benefits to employees injured or killed in a job-related accident. Some of the common scenarios for this coverage follow:
- Texas and Oklahoma allow an employer to opt out of the state's workers compensation law. Occupational accident insurance is an alternative way to fund the employer's obligation to the employee.
- Some other states allow employers to assume part of the workers compensation risk themselves, subject to state approval. Occupational accident insurance can fund the assumed risk.
- Companies in the trucking industry use occupational accident insurance to provide benefits to owner-operators who are not employees.
Occupational Accident Statistics
The International Labor Organization provides these worldwide statistics:
- 2.3 million people die each year from work-related accidents and injuries.
- There are 340 million work-related injuries each year.
- There are 160 million work-related illnesses each year.
What Is Occupational Accident Insurance?
If you are looking for an occupational accident insurance definition, this is a policy that is designed to offer benefits to independent contractors and employees who not covered under a workers compensation policy.
Here are some interesting facts about how and why employers choose this coverage:
- Alternative to workers comp: In some states, an employer can choose to opt out of their state's workers compensation law. However, the employer still has the same legal obligation to employees who suffer injury or death on the job. An occupational accident insurance policy gives the employer the means to fund most or all of this obligation at a lower cost than a workers compensation policy.
- Owner operator coverage in the trucking industry: Many trucking companies use occupational accident insurance for truckers to fund benefits for owner-operators who are not employees. Trucking companies like to have this coverage in place because, in some circumstances, owner-operators may be deemed to have become employees or they may assert that they are employees and file an injury claim against the employer.
With a workers compensation policy, you get statutory benefits, but with an occupational accident insurance policy, you must make the following choices:
- The limit of liability to carry per accident
- The deductible to assume per accident
- The level of disability coverage to provide
- The level of death benefit to provide
You will be responsible for any legal obligation to an employee not covered by your occupational accident insurance coverage. If you choose the wrong coverage options, you may expose yourself to financial obligations larger than what you may be equipped to handle.
A local independent agent in the Trusted Choice network can provide the assistance you need to address your risks and concerns. Your agent can also identify and provide the complete range of business insurance your company needs.
Should You Get Occupational Accident Insurance?
A workers compensation policy automatically provides all the benefits mandated by a given state's workers compensation law. The policies offer little or no choice as to available coverage.
However, if you opt out of all or part of your state's workers compensation program, you assume liability for the same benefits you would have available to you under a workers compensation policy. Some very large employers have the financial resources to self insure against worker injuries, illnesses and fatalities. Most others will have to have protection against a large loss or series of losses.
Occupational accident insurance is normally divided into several areas:
- An amount available to pay medical benefits arising from a single accident
- Accidental death and dismemberment benefits, normally limited to a multiple of the employee's annual salary
- Disability benefits that will pay part of a disabled employee's salary for a certain period of time
Alternatively, the policy may have a combined single limit that will have one lump sum available to pay benefits in all three areas.
In any case, the policy will have a per-accident deductible and an annual maximum payable amount.
Installing an insurance program can be complicated. Work with an agent who can help you compare options and rates from multiple companies to give you the best program at the lowest cost. An independent agent within the Trusted Choice network can help you.
Truckers Occupational Accident Insurance
Occupational accident insurance makes benefits available to owner-operators who are considered independent contractors and are not covered by workers compensation insurance.
If you run a trucking company, this coverage can be beneficial for several reasons:
- You will be able to offer benefits to your owner-operators for injuries they suffer on the job while under contract to you.
- You will have protection in the occasional case when, after an accident, an owner-operator tries to make a workers compensation claim against you if there are no other benefits available.
- Owner-operators will be more likely to contract with you if this benefit is available.
- You will reduce the likelihood of having a lawsuit filed against you if owner-operators are able to get compensation for illnesses and injuries.
Your Occupational Accident Insurance Options
Because benefits are not mandated by law, occupational accident insurance is more flexible than workers compensation. Your coverage choices include these options:
- Accidental death benefit
- Survivors benefit
- Accidental dismemberment
- Accident medical expense
- Temporary total disability
- Permanent total disability
- Non-occupational accident benefit
- Hernia and hemorrhoid benefit
- Chiropractic benefit
- Passenger accident benefit
As the owner, you can design a truckers occupational accident policy suited to your needs and budget. You need to work with a professional in designing your truckers occupational accident insurance. Contact an independent member agent of the Trusted Choice network for assistance.
Contingent Liability Coverage
You can typically purchase contingent liability coverage only after you have an occupational accident insurance plan in place. Contingent liability coverage can protect your trucking company should an owner-operator initiate an action claiming to be an employee, rather than an independent contractor, and demanding workers compensation benefits. The policy will cover legal costs and, should the action be successful, will compensate you for benefit costs beyond those provided by the occupational accident policy up to the policy limits.
Sometimes the line between employee status and independent contractor status can become blurred. Laws governing this terminology can vary from state to state. If you are a trucking company owner with an occupational accident policy in place, a contingent liability policy will give you an extra layer of protection.
This is an issue to discuss with your attorney. A properly drawn owner-operator contract will help protect you against an employee status suit. But should you lose such a suit, you will be able to fall back on your contingent liability policy.