Occupational Insurance vs. Workers’ Comp
Workers’ compensation and occupational accident insurance, including occupational accident policies, both provide a level of protection for employees in the event of workplace injuries. Whether you are a startup business, a midsized corporation, a full-time employee, or an independent contractor, it is important that you understand the differences between the two (workers’ compensation and occupational accident insurance) in order to protect you when it comes to workplace accidents.
The nature of occupational insurance vs workers comp is such that your claims are likely to be significantly different (and the case strategy different as well) depending on what “category” it falls under. In truth, many people are confused as to the differences — that’s because occupational insurance vs workers comp both contemplate issues in the workplace. The coverage tends to be quite similar. That being said, the ways in which that coverage is effectuated are quite unique, depending on which one applies to your claim.
Workers’ Compensation Insurance
Workers’ compensation policies are a state-regulated requirement for companies that employ a minimum number of workers, or employees who work a certain number of hours per week as mandated by law. The minimum number of employees differs by state, but in some instances, it refers to one or more employees, while others allow for 5+ employees.
Workers’ compensation policies may cover lost wages, medical treatment and related expenses, and rehabilitation for employees who suffer an injury at work, or who get sick due to factors within their workplace environment. The insurance also includes employer liability coverage, meaning that employers receive a level of protection if the worker decides to sue in relation to their workers’ comp claim. The legal defense costs are often covered up to the policy limits. Employers still have a responsibility to maintain a safe work environment for their workers.
Occupational Accident Insurance
Occupational accident insurance is a policy that is designed to offer benefits to independent contractors and employees who are not covered under a workers’ comp program, including covering medical expenses resulting from work-related injuries. This type of insurance may provide medical, disability, and accidental death and dismemberment benefits, but unlike workers’ compensation – it is not state-regulated. This type of insurance is particularly popular in the trucking industry, where it provides coverage for independent contractors and owner-operators. Policies may cover wage loss benefits, medical expenses, and rehabilitation costs for employees or covered independent contractors, but only up to policy limits, specifically focusing on injuries or deaths resulting from a work-related accident. Employers are allowed to choose their coverage and deductible amounts based on their own perceived risk.
Workers’ comp involves a higher cost to companies, but it also offers them more comprehensive coverage, especially in terms of their own liability – a component that is not a part of occupational accident insurance.
In some states, employers who choose occupational accident insurance can opt for the required workers’ compensation program. While the employer still has a legal obligation to employees who suffer injuries or death on the job, it comes at a much lower cost compared to workers’ comp.
Employers get statutory benefits with workers’ comp but when signing up for occupational accident insurance, they 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 benefits to provide
Companies will still be responsible for work-related injuries to their employees that are not covered by occupational accident insurance. Choosing the wrong occupational accident coverage option can expose a company to dramatic financial losses – a problem that those with workers’ compensation insurance are less susceptible to.
Disadvantages of Occupational Insurance
While occupational insurance allows companies to save money when compared to workers’ compensation and gives employers control of the type and amount of coverage to provide employees, there are several disadvantages:
- The employer must bear the burden of proof in the event of a lawsuit
- Employees can win claims for pain, suffering, and punitive damages up to a certain limit
- If an employee’s expenses exceed occupational accident coverage limits, employers will have to cover the excess costs
As an employer, consult with an experienced attorney to ensure you understand the risks associated with workers’ compensation coverage vs. occupational insurance coverage.
As an employee, talk to an experienced worker’s compensation lawyer if you have been hurt on the job to understand the differences between occupational insurance vs workers comp so that you can understand how to proceed with a claim depending on the coverage your company offers. Even if your company does not provide coverage, there may be legal options for you to secure the compensation you deserve, so don’t resign yourself to an unfavorable outcome — speak to an attorney about what you need to do to get your case properly handled.
