Occupational Accident vs Workers Comp
So what’s the difference between Occ/Acc and Workers Comp for truck drivers?
While Occupational Accident Insurance and Workers’ Compensation serve a similar purpose (i.e., compensating workers hurt on the job), they do diverge in distinct ways. Make sure your operation has the correct coverage and limits.
In a nutshell, Workers Compensation provides coverage in case of accidents and injures sustained by your hired employees truck drivers.
Occupational Accident Insurance provides similar benefits, but to independent contractors. Owner operators that are leased onto a Motor Carrier are not considered employees, but rather, independent contractors, so Occupational Accident is the coverage many opt for.
Which type of coverage is right for you? As a motor carrier, depends on your workforce. If your drivers are employees, paid on a W2, then Workers Comp. If they are leased onto you, and you pay them via 1099, then Occ/Acc.
|Truckers Occupational Accident Insurance||Workers Compensation Insurance|
|Covers independent contractors||Covers employees, like company drivers and warehouse workers|
|Not required by law||Required by law in most states|
|Less expensive||More expensive|
|Limits, deductibles, and payout amounts decided by motor carrier’s occ/acc policy||Benefits are usually statutory and fixed by law|
Occupational Accident (Occ-/Acc) for Truckers
Since independent contractors aren’t technically employees, companies aren’t legally obligated to pay for their medical, disability, death, or dismemberment benefits in the same way as they would when a hired employee gets hurt on the job.
But, understandably, when a contract worker is hurt on the job, he doesn’t care about a company’s legal obligations—he just wants help paying his hospital bills.
Independent contractors hurt on the job will sometimes sue a trucking company, claiming that they were a hired employee all along and that they legally deserve compensation. This is where Occupational Accident Insurance comes into play.
Occupational Accident Insurance, which is particularly popular in the world of trucking, doesn’t automatically cover the same statutory limits that workers’ compensation insurance does.
Occ/Acc polices have come with different limits, deductibles, and the amount of disability coverage they provide. This usually makes Occupational Accident a cheaper alternative to Workers’ Compensation.
Workers Compensation for Truckers
Businesses are required by law to pay for a hired employee’s lost wages and medical bills if that employee is hurt on the job. Trucking company owners must have Workers’ Compensation Insurance to cover themselves against situations like these.
The payouts from workers’ compensation policies must meet or exceed a jurisdiction’s minimum requirements.
Know the laws in your State
Almost every State has their own minutia in the wording of your requirements.
Some States, like Texas, have been historically more flexible, resulting in more affordable workers comp polices for truckers.
While in California, where workers compensation is largely unaffordable, some motor carriers have to rely on the state fund for coverage.
Whether you are from Florida, Illinois or New York, or any where in between, make sure your agent is an expert in your states’ laws and requirements.
There are also monopolistic states. These are exactly how they sound.. monopolies. The State is the only place to get WC policies. Ohio, North Dakota, Washington and Wyoming are all monopolistic workers comp states.
Consider supplementing with a Contingent Liability Policy
If you are a Motor Carrier and provide occupational accident insurance for your 1099 drivers, make sure that you are completely covered. A smart occupational accident policy includes a contingent liability provision that protects you if your leased/contracted drivers get injured and claim that they are actually employees and should be covered by your Workers Comp policy.
Make sure that your limits are high enough to meet all the minimum requirements in your state.