Workplace Injury Programs for Independent Contractors

Occupational Accident

Occupational accident is a workers’ compensation alternative for 1099 independent contractors this is not for W2 employees. Occupational accident insurance covers independent contractors in the case of injury or even death if the circumstances are job-related.

OccuSafe Occupational Accident 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 and contract drivers who are independent contractors are at a disadvantage as workers’ compensation insurance in many cases cannot cover them. For such people, occupational accident insurance is an ideal choice for the following reasons:

• Motor carriers 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 a motor carrier who provides these benefits than with one who doesn’t.
• The motor carrier is protected in case an independent contractor tries to assert themselves as an employee to gain compensation benefits after an accident with an OccuSafe Contingent Liability policy.
• There is a reduced chance of lawsuits due to accidents if the OccuSafe Workplace Injury program is already in place.

Contingent Liability

• Contingent liability coverage can be purchased only after the occupational accident insurance is already in place.
• It provides coverage in the case of an independent contractor initiates 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.
• A contractor who successfully sues and is awarded employee status after an on-the-job accidental injury can present significant financial liability to the leasing motor carrier:
• Workers’ Compensation plan may be required to pay claims, negatively impacting the program’s loss ratio.
• Workers’ Compensation carrier may audit and ask for back premium on all owner operators and independent contractors.
• Self-Insured or deductible Workers Compensation plans will require the motor carrier to pay unexpected claims out of the motor carrier’s operating fund.
• The impact of employee classification may cause major tax and FICA liabilities which could put a motor carrier out of business.
• Contingent liability coverage can be considered an extra layer of protection for employers.

Insurance Planning

Motor carriers have 3 options in dealing with inherent contractor insurance issues relating to on-the-job injuries or death:

1. Do nothing – not recommended!
2. Require the owner operator/independent contractor to purchase occupational accident insurance coupled with the motor carrier purchase of contingent liability insurance.
3. Require the Owner Operator to purchase Workers' Compensation.

Sample Plan Design

• Accident Medical Insurance - $1,000,000 per occurrence no policy aggregate.
• Accidental Death & Dismemberment up to - $300,000; $50,000 paid at death and $2,500 per month for 100 months
• Accident Disability – 75% of net income; Paid weekly with a minimum of $350, and a maximum of $1,000.
• 24-hour non-occupational accident sub limited coverage up to $15,000 for accidents when not under dispatch.
• Passenger Accident AD&D up to $300,000 per occurrence.
• Hemorrhoids
• Hernia
• Occ Cumulative Trauma
• Occupational Disease
• Pre-Existing Conditions
• Seat Belt - Air Bag
• Severe Burn
• Infectious Disease
• and much more!