The Differences Between Workers’ Comp and Occupational Accident Insurance

Occupational Accident Insurance

Many companies have heard of workers’ compensation insurance, mostly because it’s necessary to have per state laws. But what about occupational accident insurance? Essentially, workers’ compensation insurance provides wage replacement and medical benefits to employees, whereas occupational accident insurance provides similar coverage, but for independent contractors. And since independent truckers make up a sizeable amount of the trucking industry’s operations, understanding the difference is essential.

The type of insurance coverage you need as a trucking business or truck driver depends on your workforce, the risk you’re assuming, and your state’s laws on employee coverage. And now, in the age of COVID-19, with more people either working from home or in altered settings, the importance of proper employee coverage is more crucial than ever.

Here’s a look at both kinds of coverage and which one is right for your operations.

What is Workers’ Compensation Insurance?

Most business owners choose workers’ compensation over occupational accident insurance for several reasons. In general, traditional workers’ compensation is more comprehensive in its reach.

At its most basic, workers’ compensation is a state-regulated policy that pays individual lost wages and all medical expenses. In addition, Workers Compensation can include vocational re-training and other similar benefits as necessary and the policy generally includes Employers Liability coverage as well.  Many states have no limits of coverage for the medical costs and reimbursements.

Unlike lawsuits related to occupational accidents, the burden of proof lies with the worker, not the company they work for. According to workers’ comp laws, the plaintiff must prove the injury or illness caused their condition. If they’re unable to show proof, they won’t have the law on their side and won’t be able to sue for pain and suffering.

Since workers’ compensation provides more protection than occupational accident coverage, it is less likely that a company will face a lawsuit.

What is Occupational Accident Insurance?

Occupational accident coverage does provide a level of coverage for accidents or injuries while a person is working. It is an optional piece of coverage and usually costs significantly less than a workers’ compensation package, making it more attractive for businesses and individuals.  Occupational Accident coverage, however, is designed for the independent contractor who wants to protect himself while at work.   It is a very relevant option for independent truck drivers as part of the overall truck insurance program and is much more affordable than employee workers’ compensation.

Occupational accident insurance also covers lost wages, medical expenses, and death benefits up to the policy limit. Also, companies can choose the deductible, disability coverage, and limits they want to buy. However, this coverage usually provides little to no legal expenses, so clients need to understand that they’re assuming financial risk.

Choosing the Right Insurance Policy

If you choose the wrong coverage, it could expose your business to financial obligations beyond what you can financially afford. This is troubling for business owners since very few statutory limitations exist for occupational accident litigation.

Lawsuits by aggrieved persons are usually lengthy, costly, and challenging. Policy limits vary from $500,000 to $5 million, and employees potentially win judgments reaching the limit for pain and suffering. With this in mind, it’s important to understand your coverage needs and make a calculated decision based on both coverages’ benefits.

About Western Truck Insurance Services

Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck, and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes. Contact us today at (800) 937-8785 to learn more.