Occupational Accident Insurance

Occupational Occupational Accident Insurance: Everything You Need To Know

A huge boon to employees everywhere, occupational accident insurance covers employees in the case of injury or even death if the circumstances are job-related. 

According to the International Labor Organization, 2.3 million people die every year from work-related accidents and injuries. Also, there are 340 million work-related injuries and 160 million illnesses each year. Considering these numbers, occupational accident coverage is quickly becoming a necessity around the world.
occupational accident insurance


What is Occupational Accident Insurance?

Occupational accident insurance (also known as occupational hazard insurance) is healthcare-related coverage in the cases of work-related injuries and death to those employees who are not already covered by a workers’ compensation policy.

This coverage is typically more flexible and cheaper than a workers’ compensation policy. Employers can choose what insurance coverage they need from the following types:

  • Temporary total disability
  • Permanent total disability
  • Survivors benefit
  • Accidental death benefit
  • Accidental dismemberment
  • Accident medical expenses
  • Non-occupational accident benefit
  • Hernia and hemorrhoid benefits
  • Chiropractic benefits
  • Passenger accident benefits

Additionally, unlike workers’ compensation, where statutory benefits are provided, occupation accident insurance policies involve making the following choices:

  • The liability limit per accident
  • The deductible amount per accident
  • The disability coverage level that is to be provided
  • The death-benefits level that is to be provided

Note that employers then become responsible for any legal obligations to employees who are not covered under occupational insurance coverage. Due to this, it becomes important to choose the right coverage options; in case they don’t, employers could face heavy financial burdens.

Occupational Accident Coverage vs. Workers’ Compensation Coverage

Both occupational accident coverage and workers’ compensation are highly similar with regard to the purpose they serve. However, there are differences.

  • Occupational accident coverage is mainly intended to cover independent contractors and, in rare cases (such as the states of Oklahoma and Texas) as a substitute for compensation insurance (and life insurance), whereas workers’ compensation insurance covers employees.
  • Occupational accident insurance is not required by law, whereas workers’ compensation insurance is required by law in the majority of US states.
  • Occupational accident coverage is less expensive than compensation coverage.
  • Limits, deductibles, and payout amounts are decided by the motor carrier, whereas workers’ compensation benefits are fixed by law.

Occupational accident insurance does the same thing as workers’ compensation coverage at a cheaper premium. It can be highly beneficial to employers by performing the dual functions of preempting lawsuits inspired by workers’ compensation laws and attracting high-quality drivers with their benefits. 

It is important, though, to find a policy that is flexible and can include various situations in its purview as occupational accident coverage isn’t an all-inclusive policy.

Why Do I Need Occupational Health Insurance?

Many employers choose this insurance over workers’ compensation policies for the following reasons:

  • Cheaper Alternative: Workers’ compensation is a government initiative and therefore, employers can still opt out of the law that governs it. However, this doesn’t take away the legal obligation the employer has towards an employee who suffers work-related accidents. In such cases, it is cheaper for the employer if he has accident insurance coverage as it fulfills all his obligations and works out cheaper.
  • Owner Operator Coverage: This point pertains to the trucking industry where many companies use occupational accident insurance for truckers who are not actually employees, as sometimes, the latter may try to assert that they are employees and make use of compensation when, in fact, they are not employees.

What Does Occupational Accident Insurance Cover?

Like we said earlier, occupational accident insurance lets you choose the kind of coverage you receive. Employees under this insurance still receive the same benefits as a workers’ compensation policy which means employers have the same liabilities in both cases (they could offset this by self-insuring against workers’ injuries or accidents).

The coverage under occupational accident insurance is divided into 3 main components:

  • An amount to pay for medical expenses of a single accident;
  • Accidental death and dismemberment benefits which are generally limited to a multiple of the annual salary of the employee in question;
  • Disability benefits that form part of a disabled employee’s salary (but only for a certain period of time).

It should be noted that disability benefits would help an independent contractor with truck payments, insurance, rent/mortgage payments, medical benefits, and living expenses.

It is also possible that instead of the above 3 components, the policy will offer a single combined limit and a lump sum payment for all 3 cases. These 3 components are also accompanied by a per-accident deductible amount and a maximum payable amount on an annual basis.

Types of Occupational Accident Insurance 

Occupational accident insurance coverage is insurance that provides coverage for those not part of a workers’ compensation policy. The new insurance coverage program will support issues like work-based damages or death. In addition to these general ideas, occupational accident insurance coverage may also offer other benefits.

Temporary total disability, permanent total disability, accidental death benefits, accidental dismemberment, accident medical expenses, and passenger accident benefits are available options. There are times when workers’ compensation coverage is not up to the mark for protection.

Business owners can go for occupational accident coverage in such instances. In the end, occupational accident insurance coverage is a cheaper alternative to compensation coverage for employees.

Occupational Accident Insurance for Truckers

Trucking is one of the most popular professions and highly profitable industries in the United States. However, the risk of accidents and injuries in the profession is incredibly high, and in such cases, owners/operators who are independent contractors are at a disadvantage as workers’ compensation insurance cannot cover them. For such people, occupational accident insurance is an ideal choice for the following reasons:

  • Employers can still offer benefits to independent contractors for any injuries or accidents while under dispatch or contract.
  • There is an increased likelihood of independent contractors wanting to work with an employer who provides these benefits than with one who doesn’t.
  • The employer is protected in case an independent contractor tries to assert themselves as an employee to gain compensation benefits after an accident.
  • There is a reduced chance of lawsuits due to accidents if compensation is already in place.


Contingent Liability Coverage

Contingent liability coverage can be purchased only after the occupational accident insurance is already in place. It provides coverage in the case of an owner/operator initiating a claim of being an employee, rather than just an independent contractor, in order to receive workers’ compensation policy benefits. Thus, contingent liability coverage (accident insurance) covers all legal costs in this situation. If it is successfully proved that the employee is indeed an independent contractor, it compensates the employer for any additional expenses that may have been incurred (but only up to the policy’s limit). Contingent liability coverage can be considered an extra layer of protection for employers.


What to Look for in Occupational Accident Policies

Occupational accident insurance carriers should look into a few things when considering the best occupational accident policy. Here’s what you should look for:

  • A policy that can bundle both contingent liability and occupational accident coverage
  • Flexible coverage for different types of situations
  • Passenger accident and non-occupational coverages


How Much Does Occupational Accident Coverage Cost?

Though the cost varies depending on several factors, the primary factor is how many independent contractors employers wish to insure. The secondary factor would definitely be the insurance company employers choose, as different companies would offer different quotes and different premiums, which are, in turn, influenced by several other factors. Additional factors that influence premium rates would include past records of safety, policy limits, and the deductible amount.

The best thing employers can do to check occupational accident insurance costs is to shop around. In a competitive industry, companies may offer lower premium rates to build a larger customer base.

Finally, opting in for this kind of insurance will help keep your business afloat in the event of one or more of your contractors suffering any injuries and illnesses. And this sounds like something you would consider doing for your business, feel free to reach out to one of our insurance specialists and get your occupational accident coverage quote today!